FAQs

1. What payments do we, as employers, need to pay on super?

An employer needs to pay the 9% superannuation guarantee on ordinary time earnings from 1 July 2008. Below is a detailed listing of all possible payments.

Checklist for salary or wages and ordinary time earnings 

 

Payment type

Salary or wages

Ordinary time earnings

Expense allowance that is paid with the expectation that it will be fully expended in producing income (for example, car allowance paid to real estate agents)

No

No

Allowances paid (other than a reimbursement of expenses or expense allowance)

Yes

Yes

Reimbursement of expenses (for example travel costs)

No

No

Bonuses that don’t relate to specific performance criteria (for example Christmas bonuses)

Yes

No

Other bonuses

Yes

Yes

Commission

Yes

Yes

Over-award payments

Yes

Yes

Shift loading

Yes

Yes

Overtime

Yes

No

Casual loading

Yes

Yes

Benefits subject to fringe benefits tax (FBT)

No

No

Workers compensation payments, including top-up payments where no work is performed

No

No

Workers compensation payments, including top-up payments, paid by the employer, where work is performed

Yes

Yes

Top-up payments (for example when serving on jury duty or with reserve forces)

Yes

No

Payments when on maternity or paternity leave

Yes

No

Pay for annual holiday leave taken

Yes

Yes

Government wage subsidies (for example Wage Subsidy Scheme allowance)

Yes

Yes

Annual leave loading

Yes

No

Pay for sick leave taken

Yes

Yes

Pay for long service leave taken

Yes

Yes

Accrued annual leave, long service leave and sick leave paid as a lump sum on termination

Yes

No

Payments in lieu of notice

Yes

No

Redundancy payments

Yes

No

Other payments paid by an employer on termination of employment

Yes

No

Director’s fees

Yes

Yes

Payments for performance in, or provision of services relating to entertainment, sport, promotions, films, discs, tapes, TV, or radio

Yes

Yes

The labour portion of payments to contractors who are employees for super guarantee purposes

Yes

Yes

Dividends

No

No

Partnership and trust distributions

No

No

Payments for entering into a restraint of trade agreement

No

No

Payments for domestic or private work under 30 hours per week

No

No

 

2. How do I work out how much I pay in capital gains tax on the sale of my rental property?

The profit you have made on the sale of a rental property (or shares) is added onto your other income (eg salary, bank interest) and taxed at your marginal tax rate. Remember, if you have held the property for more than 12 months the ATO give you a 50% discount on the profit you need to declare as income.

 

3. What accounting software do you recommend?

We use MYOB and Quicken but prefer MYOB. You have the option of MYOB with payroll or without for one user or MYOB Premier for multiples users at any one time. We can arrange this software for you at your request.

  

4. What is the main difference between a company and family trust?

One of the main differences is how they are taxed. A company’s profit is capped at a tax rate of 30%. The profit of a family trust is not taxed within the trust itself. The profit is reported on the tax returns of family members and taxed at the individual’s marginal tax rate. To read more on different structures click here

 

5. Should I start a Self-Managed Super Fund (SMSF)?

There are three factors you should consider when deciding on setting up a SMSF. Firstly, you really need around $200,000 in super to justify the fees and time involved in managing the SMSF. The second reason that would justify an SMSF would be if you want to invest in an asset which is normally not available through a retail/industry fund such as commercial property for your business to operate or shares in an unlisted company. Finally you may be a bit of a control freak and just want to exercise your full control over your superannuation and a SMSF can allow you to do that.