It's now July, and for employers that means the fun job of preparing Payment Summaries for your employees (due by 14 July) and lodging an Annual PAYG Withholding Report for the ATO (due by 14 August). If your payroll system is up to scratch, it should be a breeze, but often that's not the case.
For employers, it's vitally important that all the numbers reconcile, so as to avoid ATO attention and ensure you don't trigger an ATO review or audit. That means making sure all the following information is the same:
1. The total of your employee Payment Summaries;
2. The salary information in your accounts;
3. Your Annual PAYG Withholding Report;
4. The total of your BAS's (Business Activity Statements) lodged throughout the year;
5. Certain salary information disclosed in your annual tax return.
The best way to make sure all these balance is to do a thorough reconciliation BEFORE Payment Summaries are issued. We've seen clients get in a world of pain when we come to do their tax return because the total of their Payment Summaries doesn't balance with what's on their BAS's or in their accounts. It can mean having to re-issue Payment Summaries, re-lodge Annual PAYG Withholding reports, and worst case scenario can mean an ATO audit!
It's also important for your employees that all the numbers disclosed on their Payment Summary are correct. Typical mistakes we've seen employers make in the past are disclosing reportable fringe benefits, certain allowances, and termination payments incorrectly. For one of our clients, their employer's mistake would have cost them around $3,000 in tax had we not picked up on the error.
If this all sounds too hard, or you don't have the time or resources to cope, please give us a call. We can help tick all the boxes so you have assurance that what you're lodging with the ATO and providing to your employees is correct.
You can contact us by emailing firstname.lastname@example.org or calling 0430 918 618. Feel free to check us out on Facebook or Instagram, or visit our site - www.ascend.net.au.