Employee Obligation (Australia) Checklist

Employing staff means meeting a number of legal obligations. Before employing staff, you need to have an understanding of what you are required to comply with.  Use this framework to help review compliance of obligations for supporting Australian Employees.
How often should this be used?
An annual compliance review is recommended
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Employee Obligation (Australia)


All employees completed a tax file number declaration.
Superannuation choice offered.
Super guarantee payments made four times a year.
Most of your employees, whether full-time, part-time or casual, will be covered by the superannuation guarantee legislation. Generally, you have to pay super for your employees if they are:
  • Aged 18 and over
  • Paid $450 or more before tax in a calendar month. Employees who are under 18 years old must also work at least 30 hours per week.
  • Eligible contractors are also entitled to super guarantee payments, even if they have an Australian Business Number (ABN)
If you don't make contributions by the cut-off dates for each quarter, you'll face penalties.
If you are self-employed, you don't have to make super contributions to a super fund for yourself.
Most self-employed people can claim a full deduction for contributions they make to their super until age 75
Difference between contractor and an employee for tax purposes understood.
Understand when a contractor is entitled to super guarantee payments.
Copies of relevant awards for your employees.
Withholding income tax.
Withholding income tax
  • Under the Pay As You Go (PAYG) system, you're legally required to withhold income tax from your employees’ salaries
  • You have to withhold an amount from their wages and send it to the ATO
  • As a new employer, you must register with the ATO before you withhold tax from payments to your employees
  • You do not need to withhold tax from payments to contractors
  • But if a worker quotes an ABN, it doesn't mean that they're a contractor. Whether they are an employee or contractor depends on the circumstances of how you engage them, and how the work is performed
The ATO has a checklist to help determine if someone is an employee or contractor
Current workers' compensation policy.
Workers' compensation insurance
  • Insures employees against injury or death caused in the workplace
  • Injured workers can receive weekly payments to cover loss of earning capacity, payment of medical expenses and vocational rehabilitation, and assistance in returning to work
  • As an employer you must:
  • Maintain a safe workplace
  • Maintain workers' compensation insurance
  • Protect yourself and your workers from financial hardship in the event of a workplace injury
  • An employer who does not have a current policy may be prosecuted and be liable for steep fines, if found guilty of an offence
  • If a worker is injured, uninsured employers may be held responsible to pay the full cost of compensation
  • You should have an occupational health and safety policy in place, and all employees should read it before they start working for you
Employers and staff have obligations to ensure a workplace is safe, so it's important to make sure your employees are informed
Written occupational health and safety policy.
Maintain accurate wage records for payroll tax purposes.
Payroll tax
  • A state tax on the wages paid by employers
  • Calculated as a percentage of the wages you pay each month
  • You must pay payroll tax if your total Australian wages bill exceeds the exemption threshold that applies in your state or territory
Your local revenue office can give you more information about the payroll tax rate and threshold that applies to you
Provide pay slips with each employee's pay.
  • Must specify each worker's gross pay, the tax withheld and compulsory superannuation contributions
  • Requirements vary depending on state or territory legislation or the award you pay your employees under
Payslips fulfil the requirements in your state.
Understand if you provide taxable fringe benefits to employees.
Fringe Benefits Tax (FBT)
  • A tax paid by employers on certain benefits provided to their employees
  • Separate from income tax and based on the taxable value of the fringe benefits you provide
  • If your business provides fringe benefits to employees you need to:
  • Register for FBT
  • Understand which benefits are subject to FBT
  • Keep FBT records
  • Calculate how much FBT you have to pay
  • Lodge a return and pay FBT to the Australian Tax Office (ATO)
  • Report fringe benefits on your employees' payment summaries
Statement of existing employee liabilities if business purchased.
Buying a business
  • Where you buy a business and keep the existing employees, you may become responsible for any employee liabilities which have accrued up until the date of the sale
  • Your responsibilities regarding the re-employment of staff should be outlined in the sale contract
  • It's a good idea to obtain a list of employees from the seller, including their salary and entitlements and copies of job descriptions, employment contracts, and other paperwork
  • Check out  relevant awards, agreements and legislation for a full picture of accrued entitlements such as annual leave, sick leave and long-service leave
  • Check whether compulsory superannuation payments and workers' compensation premiums have been paid
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