F.A.Q
*Disclaimer -As we are not Tax Agents, we are unable to certify to the correctness of the answers in this section. The Tax Agents, we refer you to will be able to clarify in more detail. So, if you think one of these questions are like your circumstances then please talk to the Tax Agent about these matters that may affect your tax affairs, when you speak with them. We have various Registered Tax Agents we have vetted and will refer you to them for taxation affair matters.
Since 1 July 2006 there has been a separate category for people who are temporarily in Australia. A permanent resident is generally taxed on all income in and out of Australia, but a temporary resident is exempt from paying tax on certain classes of income. People who exhibit the behavior of a ‘resident’ and hold a temporary visa granted under the Migration Act of 1958 will be taxed at resident rates. Temporary residents may also be liable to pay the Medicare levy unless they are eligible to apply for an exemption.
You would be a non-resident for tax purposes because you have not settled in any one place and established a home during your stay in Australia. You may not get all your tax back when you lodge a tax return because you will be charged non-resident tax rates. This means that you must pay tax on every dollar of your taxable income. You will not have to pay the Medicare levy and Medicare levy surcharge.
Non-residents pay tax on most Australian source income. They pay tax on every dollar of taxable income as declared on their tax return but do not pay Medicare. Residents have to declare all income earned in and out of Australia. A tax-free threshold of $6000 is available to them and a resident may be entitled to claim some tax offsets (rebates) that are not available to non-residents. Depending on their income, a resident may also have to pay the Medicare levy and Medicare levy surcharge
You cannot claim the tax-free threshold of $18,200 from more than one employer at a time. It is better to claim it from your main employer. You will pay a little higher rate of tax on the second job, but this should ensure that you have paid enough tax on all your wages for the year.
You should lodge your outstanding tax returns as soon as possible and before the Australian Taxation Office takes any action to have you lodge these tax returns. Once they have begun any action, it could result in a court conviction. The ATO may charge a penalty of $110 for every 28 days that the return is outstanding. The maximum penalty is $550 even if you are due a refund. In addition, the ATO will charge interest. This is called the General Interest Charge and is levied on any outstanding monies. The rate for the July to September 2009 quarter is 10.13%
Your return can be completed using the details from a copy of the PAYG Payment Summary (your employer can provide this), a letter from your employer detailing the information on the PAYG Payment Summary or by reviewing your pay slips for that period. If you are unable to obtain the payment summary details from an employer a Statutory Declaration would need to be completed.
It is not necessary but it is helpful as they can assist with family details. There are several questions concerning dependents, dates of birth and medical details.
Your wife does need to lodge a return even though her income is below the tax-free threshold. Any earnings that have had tax withheld, no matter how small, are required to be reported on a tax return. This is the only way to get a refund of the tax paid.
No. A PAYG Payment Summary from a past year cannot be included with the current year tax return. It can only be included in the return for the year to which it relates. You will need to submit an amendment to last year’s tax return.
One of the ways you can reduce the tax you pay is by salary sacrificing in return for employment related benefits. The advantage of salary sacrificing is that your benefit is purchased with pre-tax dollars. There are many things that you can salary sacrifice. All are subject to fringe benefits tax (FBT), except minor benefits such as a mobile phone or laptop computer that are used primarily for work. Motor Vehicles are subject to Fringe Benefits tax, but the amount is reduced if the car is used for work. The fringe benefit tax is paid by the employer and is paid at the top marginal rate of tax, including Medicare (46.5%) on the benefit provided. Some employers require their employees to reimburse the FBT amount from their salary package.
Application forms are available from the Tax Office or you can download one from www.ato.gov.au. The completed form must be returned to the ATO together with original proof of identity documents. You can mail the documents or take them to an ATO shopfront. You are not able to apply on the internet. When your documents have been examined, they will be returned to you and your tax file number will be mailed to you within 28 days. Provided you have applied for a tax file number, you have 28 days to quote your tax file number to your employer after which he is required to withhold tax from your wage at a rate of 46.5%.
If you are an overseas student living in Australia and have had your visa amended to allow you to work, you can apply on the internet. You will not need to provide documentation as proof of identity because the ATO will compare your personal and travel document details with those held on the Department of Immigration and Citizenship (DIAC) system. Provided the matching process is successful a TFN will be mailed to the Australian address that you provided on the application. This internet service is also available to working holidaymakers, New Zealanders who get a visa on arrival and permanent migrants.
Generally, payers are required to supply a Payment Summary within 14 days of the end of the financial year – i.e. 14th July. If an employee ceases employment part-way through the year, a PAYG Payment Summary must be supplied within 14 days of receiving a written request from the former employee and the request must not be made any later than 21 days before the end of the financial year. If a former employee has been receiving reportable fringe benefits (RFB) and leaves before the end of March, then the 14-day limit may need to be extended.
If you owe tax and lodge your return late, any amount owing will be payable on the 21 November this year and a general interest charge will be calculated from then until payment is made. The ATO may charge a penalty of $110 for every 28 days that the return is outstanding. Unless you use a registered tax agent, you have from 1 July until 31 October to lodge your return. If you need an extension of time either contact the ATO or a Registered Tax Agent before 31 October.
It is not necessary to complete a return before leaving Australia unless you will not be back before the due date for lodgment of your return (October 31st). If you will not be back until after the lodgment date contact the Australian Taxation Office or a registered tax agent to apply for an extension of time to lodge.
A net medical expenses offset is available where you and your dependents have incurred out-of-pocket medical expenses in excess of $1500. Eligible expenses include doctors’ fees, hospital accommodation and related charges, dental work, medicines, etc. Where procedures are of a cosmetic nature only, they will not be eligible expenses that can be included in a calculation of this offset. If the dental work, you are having is for the correction of a problem then the cost incurred will be counted towards the out-of-pocket expenses for this offset.
If you are still working, you may be eligible for a Mature Age Workers Offset for the tax year in which you turn 55 and any future years that you are working. The maximum available offset is $500. You will be entitled to the maximum if your net income from working is between $10,000 and $53,000 but may still get a reduced amount if your income from working does not exceed $63,000. If your only income is from investments, then you will not be entitled to this offset.
Taxpayers who take out private health insurance are entitled to claim 30% of the premium as a tax offset. This can be taken as a reduced premium, a cash refund from Medicare or claimed through the tax return at the end of the income year. From 1 April 2005 premiums for health insurance policies covering people over 64 years of age have attracted a higher tax offset. If the eldest person covered by the policy is aged 65 or above the offset increases to 35%. Where the eldest person covered by the policy is 70 years or over the offset increases to 40%. Further advice can be sought from the Health Fund or your registered tax agent. From i July 2010, it is proposed to income test this offset for people whose income exceeds $75,000 for singles or $150,000 for couples. The available offsets will be reduced for those in these upper income ranges using a three-tier system.
The questions on BAS Returns, GST and Bookkeeping may be referred to us as we are Bookkeepers, BAS Agents and our Owner/Manager MR Mark Hardy has a Bachelor of Business Degree along with numerous other Certificates and Qualifications and is a Qualified Accountant and BAS Agent.
Do not underestimate the value of skilled, diligent bookkeeper. Bookkeeping may seem easy but wait until you make a mess of your books. It can cause troubles for years.
Outsourcing your bookkeeping can be considerably cheaper than hiring an employee internally to carry out bookkeeping tasks. Fixed fee bookkeeping is a good way to ensure your costs do not blow out come end of year, end of quarter or end of month processing. See how BABKS can help you.
To put this in perspective, let us use payroll to illustrate. What is the hourly rate of hiring someone internally to process your payroll? Normally an hourly rate of around $30. But what if that person takes a long time to do something say four hours one week? Costs blow out to $120 just to process a pay run. All these unexpected costs add up quickly.
Consider outsourcing your bookkeeping to keep costs fixed, helping with cash flow and to fend off those surprising bills. An all-inclusive payroll package can cost as little as $50 per pay cycle, processing this internally could be considerably more than. BABKS Bookkeeping offer a fixed-fee structure, call us to check out our pricing structure.
Online accounting software, Xero, is capable of doing all of these features. Being cloud-based, it allows the user to access information anywhere, on any device, at any time, meaning you do not have to be in your office to access your information! BABKS bookkeeping we recommend the most appropriate software package that you are comfortable with. Give us a call to see how we can get you started.
If your business is currently doing its bookkeeping internally, why not consider outsourcing? Below are the top benefits of hiring qualified bookkeepers to take care of your accounts.
More Time – It frees up your time so that you can focus on dollar productive activities. If you are not skilled in this area, then the time it takes to enter transaction is much higher than necessary. Think about cost not just in terms of the dollar amount you can save by doing it yourself but also the amount you could earn for your business in the same time.
Saving Money – You do not have to employ someone who you pay regardless of what they do, so you are only paying for what you need. You also avoid all the hidden costs like super, worker compensation insurance, annual leave, sick leave, training, providing equipment, consumables, etc.
Expertise – You have access to experts on a fulltime basis without having to pay for it around the clock. Putting your accounts into the hands of highly skilled staff who understand industry leading best practice and technology your job becomes a whole lot easier and effective.
Focused – It is hard for a bookkeeper to do their job around the hustle and bustle of a business tucked away in the corner, having them offsite allows them to focus on your business
Team vs Individual – Unfortunately one bookkeeper is often not enough to effectively cope with everything that occurs within a modern business. When you go offsite you place your financial records in the hands of staff that thrive on teamwork.
Scalability – Allows you to expand or cutback in the blink of an eye. Whether you are looking to grow your business or cut down on spending, having an offsite team gives you the flexibility that in-house bookkeepers cannot provide.
Accuracy – When you hire a bookkeeping service you are engaging experts who know how to enter and classify your transactions.
Lower Turnover – Many internal bookkeepers simply leave a business due to boredom; a better opportunity comes along, or they feel underappreciated by the business sooner. No matter what the reason the absence of a bookkeeper it causes major financial turmoil for your business. If you engage an offsite company then you never have to hire again.
A bookkeeper is predominantly responsible for recording the day to day transactions of a business. Generally an accountant is engaged to provide a business advice at a higher level, such as structuring, tax planning and compliance.
Where a business engages their accountant on a proactive basis, it is beneficial if the bookkeeper works alongside with the accountant to ensure all the business’ transactions are recorded and transacted in accordance with the accountant’s advice. We have divisions in both bookkeeping and referral services in accounting, with qualified specialists in each team. Contact us to see how we can help.
Many small businesses do not have enough work for a full-time finance officer and so it is more beneficial for them to outsource their bookkeeping services until they grow large enough to warrant hiring someone for the job. How do you know that you are hiring a good bookkeeper? Will my bookkeeper do a good job? Where should I look to find a good bookkeeper? See how BABKS can help here.
It is important to ensure you can rely and trust your bookkeeper to handle your books efficiently. Hiring a good bookkeeper, is like hiring a staff member, so treat it the same. Remember to review their background, achievements, find out what other people think about them by asking around for their references and whether they get the job done.
When you know that your bookkeeper comes highly recommended, it takes the stress away from the transition period. Once you have chosen your bookkeeper, ensure you are clear with them from the start what your expectations are and keep the communication up so that no unexpected issues arise.
Superannuation is due quarterly, 28 days after the end of the quarter for exact dates of the quarters and their relevant due date see below table:
1st July – 30th September: 28th October
1st October – 31st December: 28th January
1st January – 31st March: 28th April
1st April – 30th June: 28th July
It is extremely important superannuation payments are made on time as you can face severe penalties and interest for late or missing payments.
The minimum super you must pay each quarter is called the Super Guarantee (SG) current SG contribution rate is 9.5% on ordinary earnings.
Ordinary earnings are the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings and allowances, but not overtime payments.
To calculate supers’ contributions simply multiply your employee’s ordinary earnings for the period by the current rate of 9.5%.
Not at all. We can assure you that you are not alone, and we see this all the time. We know how busy life can get sometimes and often compliance is not your number one priority, but we can absolutely get you up to date and keep you up to date. We find its easier, quicker, and more efficient for us to start with the source data and enter it rather than trying to interpret and fix incomplete and missing entries.
Do not worry whatever state your accounts are currently in we can guarantee we have seen and fixed a lot worse.
You are probably aware that it is compulsory to lodge a business activity statement at least quarterly. But maybe you have been a bit “naughty” and you have some overdue. You might have been too busy; the forms might have looked too complicated or there may have been legitimate reasons (like health or relationship issues) that stopped you from lodging. Do not worry, it is quite common, and (with the right help) the problem is easily fixed. Whatever the reason you fell behind, you need to get up to date. And once you do, you will get a better night’s sleep as well.
The easiest way is to drop in for an obligation free coffee and we will run through your situation or give us a call if you do not live locally. We deal with situations like this day in day out and can guarantee we have seen and fixed a lot worse. We will even liaise with the Australian Taxation Office and will go into bat for you to see if we can get penalties and interest waived on your behalf (no guarantees but our track record is good).
Stop stressing about it and let us handle it.
Having a good bookkeeper will ensure you have efficient accounting systems which helps you manage critical components of your business.
Most small and medium business owners do not have the knowledge, time, ability to effectively perform their bookkeeping duties. Outsourcing a bookkeeper will provide you with the time required to focus on your business operations.
Give us a call or send us an email and we’ll arrange for you to come into our office so that we can learn a little more about you and your business, as well as telling you about ourselves and letting you know how we might be able to help. The first meeting is complimentary and obligation free.
Xero is a very user-friendly software, but there are still tips and tricks that can make your life easier- even for the savviest of users. The Xero Community has a wealth of information and ‘how to’ manuals for completing different tasks, but if you need a little more hands on and personalised help, BABKS can help with a one-on-one personalised training session, ask us about Our Training Pricing. We generally find that Xero is the most suitable software for the majority of small business owners at the moment.
However, we are not a one size fits all company and our bookkeepers are also accredited in all versions of MYOB and QuickBooks (QBO) as well as various other software packages and programs. At our complimentary initial meeting we will run through what your business does and where you want to get to in the future, and from there we can make recommendations about what software would suit you best. The decision is yours, and we are more than happy to use the software you are most comfortable with.
We generally find that Xero is the most suitable software for most small business owners now.
However, we are not a one size fits all company and our bookkeepers are also accredited in all versions of MYOB and QuickBooks (QBO) as well as various other software packages and programs. At our complimentary initial meeting we will run through what your business does and where you want to get to in the future, and from there we can make recommendations about what software would suit you best. The decision is yours, and we are more than happy to use the software you are most comfortable with.
Payroll can be a complex area especially for small to medium sized businesses who are not familiar with it. A simple solution for small to medium sized businesses is to outsource their payroll function. At BABKS we have a team that specialises in processing payroll. We understand payroll is an integral part of your business and needs to be completed with accuracy as it can have a significant impact on your employee’s personal circumstances. We tailor our services to meet your business’ needs whilst ensuring all your compliance needs are met with regards to Tax and Superannuation.