Have you heard about the introduction of Single Touch Payroll (STP) which is being advertised as one of the biggest changes for small businesses since the introduction of GST?
What is this?
Payroll tax is a tax assessed based on wages paid or payable an employer to its employees. It is a state tax –each state and territory has their own legislation with varying rates and thresholds. It is also a self-assessed tax, which means that it is the employer’s responsibility to ensure these obligations are met.
Below are some of the basics of payroll tax that every business owner should be aware of.
The Treasurer has delivered the Federal Budget 2019 last night (2 April 2019), he has provided some good news to individual taxpayers and small business owners.
It is worth noting that most of the announcements he made in relation to income tax are related to future income years, there are only two announcements that will take into effect immediately. In this article we go through the ones that are affecting the 2019 financial year only.
In life we play different roles which gives us different names. You can be a parent at home, a child of your parents, a customer at the shops, or, if you run a business, a business owner. But do you know the correct name to call yourself when you run a business?
Very often we get business owners ringing saying they are the director of their company, when in fact they may not even own a company to start with. Understanding what structure your business is in is very important to avoid confusion down the track. Below is a brief description of each business structure and how you can call yourself when speaking to your suppliers or customers.
If you run your business as a sole trader, you will have an ABN for yourself, and your business is run under this ABN. You do not hold a separate entity and therefore cannot call yourself a company director.
In this case, you can call yourself a business owner, or a sole trader.
A partnership involves two or more people (up to 20, with some exceptions) going into business together with a view to making a profit.
If you are running a business under a partnership with others, then (to put it simply) you are the business owner of the partnership.
A company is a separate legal entity that consists of directors and shareholders. A company director is someone who makes decisions on behalf of the company, whereas shareholders hold shares for the company and is eligible to receive any dividends declared by the company.
If you run your business under a company, and you are the director of the company, then you can legally call yourself a director when speaking to your suppliers or customers.
A trust is a structure where a trustee carries out the business on behalf of the trust’s members (or beneficiaries). A trust is not a separate legal entity. You can have individuals or companies acting as trustee(s) of your trust, and individuals, companies or trusts to be a beneficiary of your trust.
If you run your business through a trust, you are the business owner of your business.
Only directors of a company can legally call themselves a director, if you run your business in any other format, you can call yourself a business owner.
If you are confused about what structure your business is in, we suggest going through your business documents eg bank statements for your business bank account which will contain the details of the account holder. Otherwise, if we run your books and prepare your tax return, give us a call.
Every now and then we get asked the question – “I want to hire someone to help with our business so I can have more time growing my business.” But before you put an ad up, or spread the word around, have you considered the following 10 things about finding the right staff, your business financial situation and understand the extra compliance work required?