News

Documenting gifts or loans from related overseas entities

Editor: The ATO is currently reviewing certain arrangements where Australian taxpayers seek to disguise undeclared foreign income as a gift or loan.

Genuine gifts or loans received from related overseas entities (including family members and friends) are sometimes used to fund businesses or to acquire income producing assets. 

Continue reading

ATO support for employers with expansion of STP

As part of the expansion of Single Touch Payroll (known as STP Phase 2), from 1 January 2022, employers will need to report additional payroll information in their STP reports including:

  • disaggregation of gross amounts(including separate reporting of paid leave, allowances, overtime, directors’ fees and salary sacrifice amounts);
  • employment and taxation conditions (including information from the TFN declaration); and 
  • income types (for example, salary and wages, working holiday maker income, foreign employment income).

To support employers with the move to STP Phase 2 reporting, the ATO will take the following approach:

Employers that can start Phase 2 reporting by their digital service provider’s deferral date (if applicable), do not need to apply to the ATO for more time.

If an employer’s software will be ready for 1 January 2022 and they are able to start reporting before 1 March 2022, they do not need to apply to the ATO for more time (that is, an automatic extension applies).

The ATO has also advised that penalties will not be applied for genuine mistakes in the first year of Phase 2 reporting until 31 December 2022. 

Extra super step when hiring new employees

Employers may soon need to do something extra when a new employee starts to work for them. 

Currently, if a new employee does not choose their own fund, their employer can pay contributions for them to a default fund.

From 1 November 2021, if a new employee does not choose a specific fund, their employer may need to request the employee’s ‘stapled super fund’ details from the ATO.

A stapled super fund is an existing account which is linked (or ‘stapled’) to an individual employee, so it follows them as they change jobs.  

Businesses will be able to request stapled super fund details for new employees using ‘Online services for business’, or by asking their registered tax or BAS agent to do this for them.

Good Debt vs Bad Debt

Do you know the difference between good debt vs bad debt? According to researchers the Australian household debt-to-income ratio is the 4th highest globally. As high at 3 out of 4 households have some form of debt. Close to 1 in 3 owes more than 3 x their annual income.

It’s not all bad news though. If you know the difference between good debt and bad debt, you can leverage your situation to help build your wealth. Interested? Read on.

Continue reading