Common mistake by businesses for overtime payments! DISCLAIMER: Reading this blog may save your business THOUSANDS!!

I recently emailed my previous superannuation blog to one of my colleagues to review. He's a very skilled Industrial Agent and highlighted a common mistake that businesses make with overtime and superannuation.

So what is this mistake? Employers INCORRECTLY paying superannuation on employee's overtime. There is actually no superannuation payable on overtime!

The super guarantee, which is increasing from 9% to 12% over the next couple of years, is only paid on ordinary time earnings.

Ordinary time earnings include over-award payments, commissions, shift-loading, allowances and bonuses.

What most businesses don't realise is that payments for work performed outside an employee's ordinary hours of work (overtime) are not ordinary time earnings.

So if you're a business owner, and money is tight enough just trying to cope with the overtime rates of pay, double check your payroll to make sure you are paying superannuation correctly.

If you have overpaid on superannuation, then you are able to call up the super fund, explain the situation and they may be able to refund the amount overpaid. If you are a business that has been paying super on overtime than its probably a good time to review who you are getting tax and employment advice from.

If you're unsure whether you are paying superannuation correctly, I am able to do a complimentary payroll check for your business. Contact me by email or on Twitter if you're interested in taking up this offer. Email admin@flindersaccounting.com for your free superannuation review.

 

Part 1: Potential pay decrease from 1 July 2013 - Understanding Your Superannuation Series!

Super, Super, Super - that's all that seems to be in the media right now. So I have decided to do a small series educating people on what changes are actually happening with superannuation and how they affect you.

Employers currently pay 9% of ordinary times earnings to an employee's superannuation fund, this is referred to as the 'ESG' - Employer Superannuation Guarantee. This will transition to 12% of wages over the next 6 years, starting from 1 July 2013 to 1 July 2019. The increasing increments are below. 


Increasing the superannuation guarantee rate from 9 to 12%

Year	Rate (%)
2013-14	9.25
2014-15	9.5
2015-16	10
2016-17	10.5
2017-18	11
2018-19	11.5
2019-20	12

The key issue that affects employees and employers about this change is who will pay for this increase in super. Employers using a base wage plus superannuation may expect to have to pay the superannuation increases. But, those employees on a remuneration package including super will have to  pay the difference, which means a decrease in take home pay.

Here's an example of the difference in how your wage package will change with the 12% increase:

Super at 9%

Employee 1 - Base wage of $80,000 plus super (currently 9% - $7,200) - Gross Wage: $80,000 (before tax)

Employee 2 - Remuneration package of $87,200 including super - Gross Wage $80,000

Super at 12%

Employee 1 - Base wage of $80,000 plus super (now 12% - $9,600) - Gross Wage: $80,000

Employee 2 - Remuneration package of $87,200 including super - Gross Wage: $77,600

For Employee 1, the employer is paying the 3% super increase. But, for Employee 2, the employee is paying the 3% super increase with a resulting $2,400 decrease in their pay.

Whilst the super increase will be felt in small increments, its important for employers and employees to understand what's happening and communicate between each other.

For a review of how the changes affect your businesses payroll or your wage, please contact us.

Worried about buying online? Police's security tips for shopping online.

There are many benefits to online shopping, but it comes with a huge disclaimer: BE VERY CAREFUL!!

You can check out the Australian Federal Police's tips for shopping safely online here. It's also an important read for business owners to make sure they're promoting and encouraging potential buyers to feel secure when using their website.

If you're buying from an unfamiliar website, an additional tip of mine is to trial the website out with a cheaper purchase before you go spending hundreds of dollars on a first purchase. Some questions to ask are:

1. Did the website deliver a quality product? and;
2. Did they deliver the item to you within an appropriate timeframe?

Feel free to share any of your other tips or positive or negative experiences with online shopping in the comment section below.

Looking for spare cash? Lost or unbanked medicare cheques.

With having a baby recently, there seemed to be quite a few medicare cheques getting posted out to me over the last couple of months.  Prioritising going to the bank to bank a $35 cheque amongst everything else that needs to be done in the day, can sometimes be a struggle. I tried getting the husband to bank his medicare cheque, but that just ended in him carrying it around in his wallet for the next two months!

I thought it may have just been our family with medicare cheque banking issues, but I recently spied off a family member carrying around an unbanked medicare cheque from September last year and a business client asking if I could bank their medicare cheque whilst doing some business banking for them.

It seems that I am not the only one having problems with the medicare cheques and a friend even told me that they had quite a few at home that had remained unbanked. 

So, I thought I would update everyone on changes made last year to Medicare payments to make life just that little bit easier for you. Did you know that Medicare can now transfer the payment directly into your bank account instead of posting out cheques? And they are promising that you will receive the rebate within the next business day! 

This is fantastic news. I've already made my phone call to Medicare to update my bank account details. While I was on the phone to Medicare, I also got them to check whether I had any un-presented cheques and there was actually one worth $100. So it definitely pays to give Medicare a call.

To receive your Medicare payments in your bank account call Medicare or complete the form on the link http://www.humanservices.gov.au/customer/forms/1579a

You should also note that some medical providers also allow you to swipe your debit card to receive the refund straight away!

Tax Scam Alert - Fraudulent ATO emails!

The ATO recently made an announcement that there are a number of tax refund scam emails circulating.

One of my clients received a scam email last year, so beware, it could happen to you or someone you know. Feel free to share this blog post with your family or friends - it could save them a lot of hassle and money if they fell victim to a tax refund email scam.

The scam email my client received to his business email account was fairly sophisticated. I realised it was a scam when I saw that the email was sent from the email address @ato.com [the ATO email address is ato.gov.au]. This was the first alarm bell! I also knew that the client wasn't getting a tax refund and there was no way the ATO paid refunds by entering in his credit card details.

The ATO also highights these important indicators in recognising a fraudulent tax scam email:

• the email asks you to provide personal details - be very suspicious and don't respond to anything by email
• it can sometimes be poorly worded with spelling and grammatical errors (however, the scam email below looks quite professional)

If you get an email that looks suspicious, do not download anything either! If in doubt, call the ATO on 13 28 61 to clarify any issues brought up in a suspicious email.

Remember if the email sounds too good to be true, it's probably a scam. (Unless you recieve a text message saying you have won $1 billion dollars - they're generally legit... haha JOKING!)

Example of a Fraudulent email:

From: "Australian Taxation Office" <refunds@ato.com>
Date: 9 March 2012 12:30:45 ACDT
Subject: Important Notification
Reply-To: noreply@ato.com

Australian Taxation Office 09/03/2012 TAX REFUND NOTIFICATION Dear Taxpayer, After the last annual calculations of your fiscal activity we have determined that you are eligible to receive a tax refund of 254.33 AUD Please submit the tax refund request and allow us 6-9 days in order to process it. To access your tax refund, please follow the steps below: .....- download the Tax Refund Form attached to this email .....- open it in a browser .....- follow the instructions on your screen A refund can be delayed for a variety of reasons. For example submitting invalid records or applying after the deadline. Regards, Australian Government

Examples of Tax Scams - this link is from the ATO and has a number of tax scam email examples.


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Salary Sacrificing Tax Strategy - Reminder on the Super Contributions changes!

For those that are salary sacrificing contributions into their superannuation, its important to review the concessional contributions cap for this Financial Year (12/13). The cap has decreased for everyone to a maximum of $25,000 in super contributions per financial year.

The concessional contributions cap includes the before-tax payments into your superannuation such as:

• Employer contributions of 9% of your ordinary times earnings
• Any salary sacrificing contributions
• Personal contributions claimed as a tax deduction by a self-employed person

Even if you have more than one super fund, all your contributions into each super fund will count towards the cap.

Last Financial Year (11/12) the cap for people aged over 50 years was $50,000, but this has changed from the 1st July 2012.

So, if you used to contribute more than $25,000 into your super each financial year and haven't decreased your contributions this Financial Year, now is a good time to review as the tax penalties for going over the caps are quite severe.

The extra contributions over $25,000 are taxed at an additional 31.5% plus the 15% before-tax super contributions which totals a tax of 46.5%.

Its important to remain under the contributions cap of $25,000 for salary sacrificing into your superannuation to be an effective tax strategy.

Like our Facebook page Flinders Accountants to keep up to date on the latest business tax tips and advice and Follow @TheNumbers_Lady on Twitter. 

Working Mums & Dads: Eligibility for Flexible Work Arrangements

One of the things I have truly appreciated since having kids is flexibility with my work. This stood out for me a few weeks ago when I attended my sons first school assembly and there were hardly any parents there, even though we got texted the night before about it. All the new kids, including my son, were called out to the stage to receive a certificate and I felt really privileged to be able to share this moment.

I thought I'd take the time to detail the Flexible Working Arrangements which employees may be eligible for. These minimum conditions are part of the National Employment Standards which cover everyone in the national workplace system.

Flexible Working Arrangements include:

• working less hours or changing the start and finish times
• working from home
• job sharing or splitting work shifts

Eligibility: 

• Parents who care for school children or disabled children under 18 years of age; AND
• Employed with current employer for at least 12 months or a casual employee who has been employed regularly and systematically for at least 12 months and is likely to continue working regularly.

Negotiating Flexible Working Arrangements:

The legislation requires employees to ask their employer in writing, giving details of the change you want and reasons why you're asking for the change.

Your employer has 21 days to accept or refuse your request. Employers are only allowed to refuse on 'reasonable business grounds' and they have to provide reasons.

Tips - Fair Work Australia encourage employees and employers to talk about their working arrangements and where possible reach an agreement that meets both their needs. In negotiating a win/win scenario highlight the ways the arrangement could benefit the employer, don't just talk about how good it will be for you because you can work in your pyjamas all day. Possible positives for the employer could include increased productivity, decreased costs such as office space or wages, establishing a positive culture and moral, decrease in staff turnover.

Reasonable business grounds to refuse?

Employers need to look at the following issues to justify refusing a flexible working arrangement:

• how the change would affect the workplace's finances, efficiency, productivity and customer service
• how easy it is for current staff to cover work
• how easy it is to find someone else to do the work
• the arrangements needed to accommodate the employees request.

If you would like to read more about Flexible Working Arrangements click here.

Good-luck with your negotiations!