Money
Issue No. 41 - June/July 2008
OTE change to give workers 3% raise
Many employers don’t know they are about to give their workers a 3% pay rise as superannuation changes take effect from 1 July.
Glynn Flaherty of Payroll Matters warned his
session of the Chartered Accountants Business Forum that many non-wage benefits under awards would be included in super, forcing employers to overhaul their wage systems.
In his session, Glynn highlighted imminent changes in Payroll (Pay-roll) Tax, WorkCover and superannuation handling that accounting professionals and their clients will have to master this year.
Glynn opened his address with a call for standardization. Businesses operating Australia-wide have had to comply with 17 different sets of legislation in these three areas.
“In my experience (clients) get it wrong, and not because they are not trying,” Glynn says.
“Our payroll tax laws are moving that way but workers compensation continues to be a compliance nightmare.”
Glynn calls payroll tax a “politically fantastic” tax because it is invisible to the public. Created in 1971 as a federal tax to fund a child endowment scheme, it was later transferred to State control. SA’s payroll tax take last year was $1 billion and it may increase this year as ‘harmonisation’ reforms take effect. SA will tax wages above the $504,000 threshold at 5%.
Reforms effective from 1 July are in three main areas: Grouping provisions, Relevant Contract rule and how ‘taxable wages’ are defined. SA will change to conform with NSW and Victorian rules.
‘Grouping’ is where several business entities’ payrolls can be added together if they are owned by the same organization or individual. Individual companies which don’t pay enough wages to qualify for payroll tax may attract tax when added together.
Grouping also considers how much of a group’s wages are paid in individual states and shareholdings in companies. Harmonisation changes will see SA take up the NSW definit...
