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Tax Facts - Superannuation Guarantee

In addition to employees' salaries and wages, employers are required to pay superannuation contributions on behalf of all eligible employees. This compulsory contribution is called the superannuation guarantee. The definition of employee for this purpose includes certain contractors. The minimum contribution from 1 July 2014 is 9.5% of each eligible employee's earnings base (usually their ordinary time earnings) and must be paid within 28 days after the end of each calendar quarter. Employers must also provide employees with a choice of superannuation fund.

The minimum contribution rate will remain at 9.5% until 30 June 2018. After that date, the rate will increase by 0.5% each financial year until it reaches 12% from 1 July 2022.

Employers are generally required to pay superannuation contributions for employees if they are:

Over the age of 18 (no upper age limit applies)
Paid $450 or more (before tax) in a calendar month.

If an employer fails to make the minimum contributions for a quarter by the due date, the employer is liable for the Superannuation Guarantee Charge (SGC). The SGC comprises the unpaid contributions calculated on a higher earnings base, plus an interest charge (which is credited to the employee's superannuation account) and an administration fee. The employer cannot claim an income tax deduction for the SGC.

The Australian Taxation Office (ATO) provides the following tools to help you understand and meet your obligations:

Superannuation Guarantee Charge (SGC) statement and calculator - calculate the SGC liability and prepare the SGC statement.
Employee/contractor decision tool - determine whether new or existing workers are contractors or employees (for tax and super purposes)
Superannuation guarantee eligibility decision tool - see whether an employer needs to make super contributions for employees
Superannuation guarantee contributions calculator - calculate how much super an employee should be contributing for eligible workers.

Tax Facts - State Taxes

Payroll tax

Payroll tax is a state tax on the wages paid by employers when the total wages exemption threshold is exceeded. Exemption thresholds vary between states. The definition of wages generally includes employer superannuation contributions and fringe benefits, although the definition also varies between states.

NOTE: Payroll tax is not the same as PAYG withholding tax collected by the Australian Taxation Office (ATO). PAYG is the tax deducted from an employee's income and forwarded to the ATO.

The following organisations are generally exempt from payroll tax, provided specific qualifying conditions are met:

Religious institutions
Public benevolent institutions
Public or non-profit hospitals
Non-profit non-government schools
Charitable organisations

Land tax

All landowners, except those in the Northern Territory, may be liable for land tax. In the Australian Capital Territory land tax is levied on lessees under a Crown lease, because land generally cannot be acquired under freehold title. Landowners are generally liable for land tax when the unimproved value of taxable land exceeds certain thresholds (excluding the ACT).

In some states, deductions and rebates are available, depending on how the land is used. Principal places of residence are generally exempt from land tax, however this depends on particular qualifying criteria (these vary between jurisdictions).

Land owned and used by the following types of organisations might be exempt from land tax:

Non-profit societies
Clubs and associations
Religious institutions
Public benevolent institutions
Charitable institutions

Stamp duty

Stamp duty is levied on particular written documents and transactions, including:

Motor vehicle registrations and transfers
Insurance policies
Leases
Mortgages
Hire purchase agreements
Property transfers (e.g. transfer of businesses, real estate, and particular shares)

The stamp duty rate varies according to the type of transaction and its value. Depending on the nature of the transaction, certain concessions and exemptions may be available.

State tax web sites

Particular deductions and exemptions vary between states for all duties. For additional state-specific information, visit the applicable state web site:

Tax Facts - Small Business Entity Concessions

Small businesses with an annual turnover of less than $2 million may qualify for a range of tax concessions. If your business is eligible you can use the concessions that suit you. You may have to satisfy additional conditions and will need to check whether you qualify for the concessions each tax year.

Eligible businesses can use the concessions outlined in the table.

CGT 15-year asset exemption	If you are 55 or older and retiring and your business has owned an asset for at least 15 years, you won't pay capital gains tax when you sell the asset.
CGT 50% active asset reduction	If you have owned an asset to conduct your business you will only pay tax on 50% of the capital gain when you sell the asset. For individuals (including partners in partnerships and beneficiaries of trusts), this reduction applies in addition to the standard* 50% CGT discount, thereby reducing the taxable amount to 25% of the capital gain. * For foreign or temporary residents, a reduced CGT discount between 0-50% applies depending on individual circumstances.
CGT retirement exemption	There is CGT exemption on the sale of a business asset (up to a lifetime limit of $500,000). If you are under 55, money from the sale of the asset must be paid into a complying superannuation fund, or retirement savings account.
CGT rollover	If you sell a small business asset and buy a replacement, you can roll over your CGT liability to the value of the replacement asset. This means you won't pay any CGT owing until you sell the replacement asset.
Simpler depreciation rules	You can usually pool your assets to make depreciation calculations easier. You can also claim an immediate deduction for most assets that cost less than $1,000. You can also immediately write-off – deduct the full cost in the year you buy them – most depreciating assets that cost less than $20,000 each that were bought and used, or installed ready for use from 12 May 2015 until 30 June 2018. For assets acquired between 1 July 2012 and 31 December 2013, the immediate deduction was available for assets that cost less than $6,500, and a special accelerated deduction of $5,000 was available for motor vehicles.
Simpler trading stock rules	If the value of your trading stock has not increased or decreased by more than $5,000 over the year, you can choose whether or not to do an end-of-year stock take.
Immediate deduction for certain prepaid business expenses	You can claim an immediate deduction for prepaid business expenses if the payment covers a period of 12 months or less and ends in the following income year.
Two-year amendment period	The time limit for the Commissioner or the taxpayer to amend an income tax assessment of an individual or small business is two years, instead of the standard four years.
Accounting for GST on a cash basis	You don't need to account for GST on a sale you make until you receive payment for the sale. Equally, input tax credits for purchases can only be claimed when you have paid for the purchase.
Annual apportionment of GST input tax credits	If you purchase items you use partly for private purposes, you can claim full GST credits for these on your activity statements. You can then make a single adjustment to account for the private use percentage at the end of the year.
Paying GST by instalments	You can pay GST by instalments the ATO calculates for you and can vary this amount each quarter if required.
FBT car parking exemption	In some cases you may be exempt from FBT for employee car parking.
PAYG instalments based on GDP amount	To save you working out your instalments based on actual income each quarter, all individuals and small business entities can pay fixed quarterly instalment amounts as calculated by the ATO based on their business and investment income in their most recently assessed tax return.

MORE: For more information, see the Small business entity concessions essentials section of the ATO web site.

Tax Facts - Rates and Calculators

The Australian Taxation Office (ATO) provides a variety of rate tables, tax calculators, and other tools on many topics, including the following:

Capital gains tax
Fringe benefits tax
Fuel tax credits
Goods and services tax
Income tax
PAYG withholding
Superannuation

MORE: To access these tools, navigate to the Calculators & Tools section of the ATO web site.