The tax declaration form gives you information on the tax you should withhold. If your employee does not provide a tax file number within 28 days of starting work, then you must withhold tax at the top marginal tax rate.
Otherwise you withhold the relevant tax for the salary bracket. There are a number of factors that may alter the amount of tax paid such as having a Higher Education Loan Program (HELP) debt or claiming a dependent spouse tax offset. The money you withhold from your employer is then paid to the Tax Office by way of your BAS statement.
A salary banking form allows you to make a direct payment of salary into your employee’s account.
By law you have to pay all employees a Superannuation Guarantee contribution of at least 9 per cent of their salary. The employee has the right to choose into which super fund that money is invested. You need to provide your employee with a standard choice form if they want to exercise choice otherwise the money will just go into your default fund.
All employees aged between 18 and 70 who are paid $450 or more before tax in a calendar month are entitled to super whether they are working full time, part time or on a casual basis. You must make contributions to each eligible employee at least four times a year. There are penalties if you do not meet these deadlines.
Your employees may opt to salary sacrifice into superannuation and you can claim a tax deduction for the super contributions you pay. No fringe benefits tax is payable on money salary sacrificed into super. However it is payable when a car or private health insurance fees are salary sacrificed.
New employees require paperwork. There are three key documents an employee needs to fill in and sign:
- Tax declaration form
- Salary banking form
- Super contribution form.
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