KEY OBLIGATIONS AS AN EMPLOYER
If you have employees, you'll need to:
- withhold tax (pay as you go withholding) from their wages and report and pay the withheld amounts to the ATO
- pay super, at least quarterly, for eligible employees. The rate is currently 11.5%, increasing to 12% from 1 July 2025
- report and pay fringe benefits tax (FBT) if you provide your employees with fringe benefits
- report employees' tax and super information to the ATO each pay cycle using Single Touch Payroll (STP)
- keep good records of payments, tax withheld and super contributions for at least 5 years.
By getting the basics right, you can spend less time on administration, and more time growing your business. For more information, visit ato.gov.au/employers.
SINGLE TOUCH PAYROLL (STP)
- Report payroll information through STP enabled software each time you pay your employees.
- Accurate reporting is important. The ATO uses this information in prefill and other government agencies use it when interacting with you or your employees.
- Make an end of year finalization declaration by 14 July through STP. This helps your employees complete their tax return.
- If you need to update the data you've already finalized, remember to make the finalization declaration again.
PAYG WITHHOLDING (PAYGW)
- Check the tax tables on the ATO website as workers may have different PAYG withholding rates.
- When you pay your employees, withhold a portion of their pay for tax. Report this through STP and your business activity statements, ensuring you use the same ABN for both.
SUPER GUARANTEE (SG)
- Super guarantee (SG) contributions are payments employers must make to their employees' complying super funds or retirement savings accounts to avoid the SG charge.
- Report payments electronically through SuperStream and Single Touch Payroll.
- An employee's fund must receive their super payments on or before the quarterly super due dates (28 October, 28 January, 28 April and 28 July).
- The SG rate you pay your employees on 1 July 2024 increased from 11% to 11.5%. This will increase to 12% on 1 July 2025.
- If you have a new employee and they don’t choose a fund, request their stapled super fund details from the ATO.
FRINGE BENEFITS TAX (FBT)
Four steps to getting FBT right:
- Identify the types of fringe benefits provided. If you provide non-cash benefits to your employees, consider whether FBT applies.
- Determine the taxable value. Ensure you use approved valuation methods when determining the taxable value of fringe benefits provided.
- Lodge an FBT return. You need to lodge your FBT return and pay any FBT you owe by 21 May 2025, unless your tax agent lodges it electronically for you. If the total value of reportable fringe benefits provided to an employee during the FBT year exceeds $2,000, you must include the grossed-up value through STP or on the employee’s payment summary. Contributions your employees have made towards the cost of a fringe benefit are assessable income. Be sure to include them in your income tax return.
- Keep records to demonstrate your calculations. Ensure you keep relevant records for the required timeframe to support your FBT position.