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ABNs, GST and employer responsibilities

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Go to the Handbooks Page to download the ABNs, GST and employer responsibilities handbook. (Free for NSW sole traders and NDP Sole Trader members.This email address is being protected from spambots. You need JavaScript enabled to view it. to find out more.)

Summary

Australian Business Numbers (ABNs) explained

An ABN is a number used by Australian businesses to help the government and wider community identify their organisation or business. It is 11 digits long and is unique to that organisation or business. Upon registration, your ABN will be stored with the ABR.

Starting a new business may require you to get an ABN, however, not everyone is entitled to hold an ABN. The registration process will determine your eligibility to acquire an ABN. Acquiring an ABN will come with its own obligations, and you may be required to do some or all of the following:

  • Register for goods and services tax (GST);
  • Lodge activity statements with the Australian Taxation Office ATO);
  • Register for ‘Pay As You Go’ withholding;
  • Meet employee superannuation contribution requirements; and
  • Meet applicable state, territory and federal obligations like payroll tax, worker’s compensation and any operating licences that are required.

You can register for an ABN through the Australian Business Register (ABR) website. The ABR website also contains information about ABNs, AUSkey and taxation obligations.

Goods and Services Tax (GST) explained

The Goods and Services Tax (GST) refers to a broad tax of 10%, applicable on the sale of most goods and services sold or provided in Australia. More information on GST can be found on the ATO website.

Businesses and organisations registered for GST will typically:

  • Include a GST component of 10% in the price they charge for their services or goods or;
  • Claim credits for the GST that they pay for goods and services they purchase for their business.
More information about claiming GST credits can be found on the ATO website.

Calculating current GST turnover and projected GST turnover

  • Current GST turnover - “sum of supplies made, or likely to be made, in the current month, plus supplies made in the previous 11 months, less supplies excluded.” (Australian Taxation Office, 2018)
  • Projected GST turnover - “supplies made, or likely to be made, in the current month, plus supplies made, or likely to be made, in the next 11 months, less supplies excluded.” (Australian Taxation Office, 2018)

Further information on GST turnover can be found at the ATO website.  

GST-free NDIS supports

If the conditions outlined in section 38-38 of the GST Act are met, supports and services supplied to National Disability Insurance Scheme (NDIS) participants may be GST free. Further information about GST free supplies can be found on the ATO website

Responsibilities as an employer

As an employer, it is important to manage your staff well. A key component of this is understanding the various legal obligations that you have as an employer. These obligations can come from any of the following sources:

  • Federal, state and territory laws
  • Industrial awards and agreements
  • Tribunal decisions
  • Contracts of employment (both written and verbal)
An employer has many obligations to an employee. Some of these obligations include:
  • Correct and timely payment of their wages;
  • Provision of accurate pay advice/pay slips;
  • Reimbursement of reasonably incurred work-related costs;
  • The development and maintenance of a safe work environment;
  • Ensuring adequate workers compensation arrangements are in place for every employee;
  • Conducting yourself in a way that ensures no staff have their reputation damaged;
  • Conducting yourself in a way that ensures no staff experience mental distress or humiliation;
  • Ensuring that there is no conduct that may damage the trust and confidence that is necessary in an employer-employee relationship;
  • Not providing false or misleading reference;
  • Ensuring timely and accurate forwarding of PAYG instalments to the Australian Taxation Office (ATO); and
  • Ensuring all appropriate superannuation payments are made as per the Superannuation Guarantee Legislation.

For further information on legal obligations for employing people, visit the business.gov.au website

Single Touch Payroll (STP) explained

Single Touch Payroll (STP) refers to the new way in which employers will carry out some of their reporting duties. STP commenced from the 1st of July 2018 and applies to employers with 20 or more employees. Employers will report payments such as salaries and wages, PAYG withholding and superannuation details at the time of making such payments to employees.

Employers who have 19 or less employees will also be subject to the STP reporting method from the 1st of July 2019, provided the relevant legislation is passed in Parliament. For further information visit the ATO Website

Single Touch Payroll is intended to streamline the payroll reporting process. It will change the way in which employees’ reportable payroll information is reported to the Australian Taxation Office. Most existing payroll software will be updated to include the necessary functions to carry out Single Touch Payroll. However, if you are using payroll software that will not include such functions, you will need to consider using a different payroll software solution.

Details on how to prepare for the Single Touch Payroll are available in the ABNs, GST and employer responsibilities handbook.

Compliance checklist

A compliance checklist is available in the ABNs, GST and employer responsibilities handbook. 

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