We understand that payroll on-costs, including Superannuation, WorkCover, CoINVEST, and Single Touch Payroll (STP), can be difficult to navigate on your own. This is why we are here to take that stress off your shoulders and support you in understanding what action you need to take when hiring a new employee.
Last month we released an article called ‘Do you know the on-costs of hiring an employee?‘, where we explained what different various on-costs are, how they are calculated, and when you should pay them. To further assist you we thought we would share our helpful tips to help you in meeting all of your on-cost obligations.
Our Superannuation Tips
Superannuation Scenario 1
Most payroll programs will have the Superannuation set to be the legislated percentage and will update automatically when the percentage changes. However, depending on how the Employee’s data was originally entered, the percentage might be set as a set rate. If that is the case, the payroll system will calculate the Superannuation at the wrong rate.
Our Tip
It is always a good idea to check through each employee’s information before the first payroll of every financial year to make sure the correct super percentage and calculation method are recorded for them.
Superannuation Scenario 2
Superannuation has to be paid at least quarterly and cleared through your Employee’s funds by the 28th day of the month following quarter end.
Our Tip
To avoid delays in Superannuation payments clearing your Employee’s funds by the due date, make sure you process the data in the Clearing House and make the payment by the 18th of the month. This will ensure the funds reach the required accounts by the 28th of the month.
Superannuation Scenario 3
Paying the Superannuation quarterly can be quite a large amount of money to pay out by the due date, especially if you haven’t been transferring the Super amount to another “holding” account on a regular basis.
Our Tip
You can process and pay the Superannuation monthly. This means that you only have to pay that month’s amount which helps even out your cashflow. Alternatively, as mentioned above, you can set up a separate bank account and transfer the Super amount to that on a regular basis so that you already have the funds put aside when it comes time to make the quarterly payment.
Our WorkCover Tips
WorkCover Scenario 1
Underestimating your annual wages. If you underestimate your annual wages by more than 20%, your Worksafe insurer will apply a penalty to your premium.
Our Tips
When calculating your annual wages for the coming year, add a % buffer to it to ensure that you are well and truly covered. It is also recommended to keep track of your wages paid year to date in proportion with your annual wages estimate.
Further, if the amount you are paying your employees changes over the year, you must provide your Worksafe insurer with a revised estimate within 28 days of becoming aware of that fact. Additionally, if you have paid 100% of our annual estimate by the 30th April, you will need to advise of the amended estimate.
Conversely, you should also advise them if the actual remuneration will be less than your annual estimate so that a refund of premium paid can be processed and future calculations adjusted accordingly.
Our CoINVEST Tips
CoINVEST Scenario 1
Worked days recorded incorrectly on the submission.
Our Tip
When you are processing the Worker Days & Wages form, the sheet shows you the total available worker days for that quarter. Make sure you only include days that each employee actually worked, or they used annual leave, sick leave or took an RDO. You also include public holidays as worked days if the employee was paid for that day, and school days for apprentices are also included. The only days you would exclude from the submission are days that your employee took off without pay.
Therefore, don’t just type in the suggested worker days but review each employees pay slips to see if any days were taken as Leave Without Pay, and deduct these days from the total days for that employee for the quarter.
CoINVEST Scenario 2
Gross Wages were not reported correctly.
Our Tip
Gross Wages includes normal hours worked, and for other items to include or exclude, please refer to the table below taken from the CoInvest web site as a quick guide:
| Included | Excluded |
| Rostered days off | Overtime |
| Annual leave taken | Living Away From Home Allowance (LAHA) |
| Paid sick leave | Fares and travelling allowance |
| All site allowances | Annual leave loading |
| Wages upon termination (including annual leave and RDO’s) | Redundancy packages |
| Wages paid in lieu of notice | WorkCover payments |
| Long service leave paid by CoINVEST |
Our Single Touch Payroll (STP) Tips
STP Scenario 1
The STP filing failed or was only partially successful. This may happen from time to time if you have unstable internet, or the ATO were experiencing issues at the time you attempted to file the STP with them.
Our Tip
Simply wait until you process your next payroll and file that STP with the ATO as you normally would. This STP lodgement will update the year to date figures for the failed lodgement.
STP Scenario 2
Employees data not showing in their tax return as “Tax Ready” after year end.
Our Tip
You must remember to file an STP Finalisation Event with the ATO by the 14th July every year to advise them that you have reconciled your payroll for the year and that each employees data is correct. Once you have filed that with the ATO, your employees will be able to access that data in their personal tax returns.
Each payroll software does this in a different way, so please do not hesitate to contact us if you need assistance with processing the Finalisation Event for your file.
How we can help you
Our team of Bookkeepers is here and ready to support you with all of your Payroll queries. If you have any questions regarding our tips, or you would like to speak to one of our payroll experts directly, contact our offices at (03) 5221 6399 or at info@davidsons.com.au.
This article was written by Bookkeeper Leanne Hamer.
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Disclaimer: This information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.