In 2021 I am going to be providing you some great information every Monday morning so I would like to welcome any questions. If you have questions regarding GST, Jobkeeper, your employees, what your obligations are, basically anything, please DM them to me or email them through my website and I will attempt to provide answers for you in the following weeks’ video upload.
Our first Monday Tip is about Tax Declaration Forms and Tax-Free Thresholds.
As an employer when you engage staff – whether they are casual or full time or part-time, it is your job to get all their relevant information — their name, address, and phone number, etc
But the most important thing is the Tax Declaration Form quoting their tax file number.
and their level of tax what they are claiming, if the Tax-free Threshold is claimed or not; whether they have a HECS, or other financial debt to the ATO.
It is not your job as an employer to police all of this. But it is your job obviously to process this in the payroll and to file this form to the ATO.
Once upon a time we all believed that if you have two jobs, your second job had to be taxed at the absolute highest rate, which means you did not claim the tax-free threshold. However, this is not the truth. This is a myth.
We love good myth busters, don’t we?
So basically there is a little bit of a rule with regards to this and it is the Tax-Free Threshold amount. Currently at the moment, in Australia it is $18,200. So if you have three jobs and these three jobs are not totalling over $18,200, you can claim a Tax-Free Threshold from all three employers.
However, if you are claiming the Tax-Free Threshold from these employees and your income totals more than the amount of $18,200 you have UNDER PAID TAX. This will mean you will end up with a tax debt once you lodge your return. If you have been overcharged tax by not claiming the Tax Free Threshold, and your income doesn’t reach that magic number, then you will end up with a bit more of a refund when you lodge your return
So it is like force savings. But in any case, as an employer it is not your job to make that final decision for that employee.
However, there are people that fill out that form and really do not know what that all means.
Obviously, you can advise them what a Tax-Free Threshold means or direct them to the ATO website and that provides them the information for them. Again, your job is to just process their pay.
So again, that is our Monday tip! In summary, as an employer it is not your responsibility to make sure the form is filled out correctly. As an employee, it is up to you to fill this form in correctly.
For more information please visit www.flexiblefinancialsolutions.com.au or call for a FREE no obligation meeting / zoom call.
Angelique is the Founder and Managing Director of Flexible Financial Solutions based on the Gold Coast, Queensland.
With over three decades of bookkeeping experience, and qualifications in Small Business Management and Financial Services, Angelique has an understanding of all aspects of businesses from the ground up. By cutting through complex “numbers” jargons and breaking down complex terminology to help her clients gain better understanding, Angelique grew her current loyal client base from humble beginnings in Queensland.
What started as a one-woman practice has quickly expanded to a team of professional bookkeepers and BAS Agents. Today, Flexible Financial Solutions care for clients from many different parts all over Australia and have grown to become a part of ‘the family’ of many Australian businesses.