As an employer, you need to be aware of your responsibilities for tax and superannuation. Your obligations vary depending on the status of your workforce and if they are employees or independent contractors.
Pay as you go
- registering with the Australian Taxation Office
- deciding the status of the workers - eg employee or contractor?
- working out the amount to withhold
- paying the tax office
- providing payment summaries and an annual report.
Employers must also withhold tax from payments to other businesses that do not quote an Australian Business Number (ABN) on their invoice.
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Fringe benefits tax
Employers must pay the fringe benefits tax (FBT) for any benefits paid to an employee or the employee's associate in place of salary or wages.
Examples of benefits include a car, car parking, low-interest loan and payments of private expenses.
If you are an employer and provide fringe benefits to your employees, the Australian Tax Office (ATO) recommends you register for FBT.
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Payroll tax
Employers must pay payroll tax on wages paid to their employees. This state-based tax is calculated on the amount of wages your business pays per month.
You must pay payroll tax if your total Australian wages exceed the exemption threshold that applies in your state or territory. Exemption thresholds vary between states.
The term wages is broad and includes:
- salaries
- commissions
- bonuses
- allowances
- directors fees
- fringe benefits
- payments in kind
- superannuation contributions.
You must register for payroll tax in your state or territory. Check with RevenueSA for your payroll tax rate and the threshold that applies to you.
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Superannuation
All employers must make superannuation contributions for their eligible employees as part of the nation's
superannuation guarantee arrangements.
You are considered an employer if you employ workers under a verbal or written employment contract on a full-time, part-time or casual basis.
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More information