Compliance obligations

Pay As You Go withholdings

When businesses make payments to employees, certain contractors and other businesses (that they engage workers through), an amount needs to withheld from the payment and sent to the Australian Taxation Office. This is referred to as ‘pay as you go’ withholdings (PAYG), which are intended to prevent workers from having a large amount of tax to pay at the end of the financial year.

Payroll taxes

Payroll taxes are levied on wages paid or payable by an employer to their employees. This occurs when the total taxable wages of an employer (or group of employers) exceed a threshold amount.

Payroll tax rates and thresholds vary between states and territories and so employers need to be conscious of this if they operate throughout the country as payroll tax is self-assessed and lodged by an employer.

Superannuation

Superannuation is a compulsory contribution that employers must make to employees, in addition to and calculated on their base wages or salary. The minimum superannuation guarantee is calculated as a percentage of each eligible employee’s ordinary time earnings (OTE). OTE is the gross amount an employee earns for their ordinary hours of work and includes:

• over-Award payments;
• commissions;
• shift loading;
• annual leave loading;
• allowances; and
• bonuses.

The current superannuation guarantee contribution percentage is currently 10.5% and will soon increase to 11% as of 1 July 2023.

Workers’ compensation insurance

Workers’ compensation is a type of insurance that employers operating in Australia are required to have. A policy provides payments to employees to cover their wages while they are unfit for duties (as the result of a workplace injury) and also pays for medical expenses and rehabilitation.

Workers’ compensation insurance is typically taken out in the state or territory in which the business is based, and employers should also take into consideration the location where employees are primarily based. Where a worker undertakes work across more than one state or territory, employers will need to consider to the ‘state of connection’ test, to determine the jurisdiction in which they are required to obtain workers’ compensation insurance.

Whistleblower policy

Public companies and large proprietary companies are required to implement a compliant whistleblower policy in accordance with the Corporations Act 2001 (Cth).

Broadly, a proprietary company is one which satisfies at least 2 of the following criteria:

1. the consolidated revenue of the company and entities it controls (if any) for a financial year is $25 million;
2. the value of the consolidated gross assets of the company and the entities it controls (if any) at the end of the financial year is $12.5 million; or
3. the company and the entities it controls (if any) have 50 or more employees at the end of the financial year.

Modern slavery statements

The Modern Slavery Act 2018 (Cth) requires entities with an annual consolidated revenue of $100 million or more to annually prepare modern slavery statements reporting on their efforts to assess and address modern slavery risks in the global operations and supply chains. Entities are considered reporting entities if they are an Australian entity at any time in the reporting period, or if they carry on business in Australia at any time during the reporting period.

Workplace Gender Equality Reporting

Australian private sector employers with 100 or more employees must report to the Workplace Gender Equality Agency on six Gender Equality indicators each year. Submissions are made in the WGEA Portal during the two-month submission period of 1 April to 31 May.

The annual submission consists of three parts:

1. An online questionnaire related to an organisation’s policies, strategies, and actions on gender equality;
2. One or more Excel worksheets (Workplace Profile) collecting workforce composition and salaries and remuneration; and
3. One or more Excel worksheets (Workforce Management Statistics) collecting employee appointments, promotions, resignations, and parental leave.

Getting things rights the first time will allow businesses to focus on operating and expanding their business presence in Australia.