42: Master Payroll Tax from Basics to Best Practices Part 2

09/02/24 • 25 min

Smarten Up! The Tax and Business Podcast

Are you underestimating your payroll tax liabilities? Discover the hidden traps in payroll tax grouping and contractor provisions that could cost your business big time.

In Part 2 of this two-part series, Sally Preston dives into the complexities of payroll tax that often trip up employers across Australia. Building on the foundations laid in Part 1, this episode unpacks two notoriously tricky areas: payroll tax grouping and contractor provisions.

Sally reveals how seemingly simple business arrangements can lead to unexpected tax liabilities and highlights the common pitfalls that could put your business at risk. Whether you’re a startup or a large enterprise, this episode is a must-listen to ensure you’re not caught off guard by the intricacies of payroll tax law.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

An overview of this episode’s topics and a recap of Part 1 (00:11)
How businesses can unintentionally be grouped for payroll tax purposes, and why this matters for your bottom line (02:41)
Examples of how employees working across multiple businesses can trigger unexpected grouping (06:07)
Ways in which controlling interest in different entities can lead to payroll tax grouping (07:46)
The complexities of tracing corporate interests and how they can create larger, unexpected payroll tax groups (09:45)
The financial implications of grouping and how it affects your payroll tax liabilities (11:15)
The intricacies of contractor provisions and the steps to determine if a contractor is actually an employee for payroll tax purposes (13:08)
What constitutes a "relevant contract" and how it impacts payroll tax (13:56)
Key exemptions that could save your business from unnecessary payroll tax (19:05)
Actionable advice on assessing your payroll tax obligations and when to seek expert help (23:32)

Payroll tax can be a minefield, especially when it comes to grouping and contractor provisions. Don’t let these complexities catch you off guard. Take the time to understand your obligations, and when in doubt, always consult with an expert.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/
Facebook: https://www.facebook.com/SmartSolutionsTax
Instagram: https://www.instagram.com/smartsolutionsau/
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LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/

Are you underestimating your payroll tax liabilities? Discover the hidden traps in payroll tax grouping and contractor provisions that could cost your business big time.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

An overview of this episode’s topics and a recap of Part 1 (00:11)
How businesses can unintentionally be grouped for payroll tax purposes, and why this matters for your bottom line (02:41)
Examples of how employees working across multiple businesses can trigger unexpected grouping (06:07)
Ways in which controlling interest in different entities can lead to payroll tax grouping (07:46)
The complexities of tracing corporate interests and how they can create larger, unexpected payroll tax groups (09:45)
The financial implications of grouping and how it affects your payroll tax liabilities (11:15)
The intricacies of contractor provisions and the steps to determine if a contractor is actually an employee for payroll tax purposes (13:08)
What constitutes a "relevant contract" and how it impacts payroll tax (13:56)
Key exemptions that could save your business from unnecessary payroll tax (19:05)
Actionable advice on assessing your payroll tax obligations and when to seek expert help (23:32)

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/
Facebook: https://www.facebook.com/SmartSolutionsTax
Instagram: https://www.instagram.com/smartsolutionsau/
Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517
Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/
LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/

Previous Episode

41: Master Payroll Tax from Basics to Best Practices

Are you ready to untangle the web of payroll tax and save your business from costly mistakes? Join us as we break down the essentials every employer needs to know!

In this revealing episode, Sally Preston dives deep into the often confusing world of payroll tax — an essential topic for business owners and managers. Whether you're a startup or running a large enterprise, understanding payroll tax is crucial for staying compliant and avoiding hefty penalties.

In Part 1 of this two-part series, Sally lays the groundwork, covering the basics of payroll tax in Australia, how it’s calculated, and the critical factors that could impact your business across different states and territories. She also offers insights into common pitfalls and the best practices to ensure your payroll tax obligations are met with precision.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

An overview of this two-part series (00:26)
A breakdown of payroll tax’s state-specific nature in Australia and the significance of harmonisation in legislation (00:53)
Understanding payroll tax thresholds and rates, why they vary across states, and what you need to know to stay compliant (03:04)
What counts as taxable wages and the hidden elements that could trip up your payroll tax calculation (04:18)
How to handle payroll tax when your workforce is spread across Australia (06:58)
Key steps for calculating payroll tax, including the importance of determining your total Australia-wide wages (10:25)
What you might be able to exclude and why small business concessions could be a game-changer (14:19)
The risk of audits and penalties — common mistakes businesses make and how to avoid them (17:23)
What to do if you discover an error in your payroll tax (19:35)

From the intricacies of state-specific legislation to the nuanced inclusion of allowances, benefits, and even certain contractor payments, Sally’s expert guidance will help you navigate the complexities of payroll tax with confidence.

If you've ever wondered how to avoid the common mistakes that could trigger a costly audit, or if you simply want to ensure you’re doing things by the book, this episode is a must-listen.

CONNECT WITH SALLY PRESTON

Website: http://www.smartsolutionstax.com.au/
Facebook: https://www.facebook.com/SmartSolutionsTax
Instagram: https://www.instagram.com/smartsolutionsau/
Smarten Up - The Tax and Business Podcast Facebook: https://www.facebook.com/profile.php?id=61555018481517
Smarten Up - The Tax and Business Podcast Instagram: https://www.instagram.com/smarten_up_podcast/
LinkedIn: https://www.linkedin.com/company/smart-solutions-tax-and-business-advisory/

Next Episode

43: Cash Flow Tips to Keep Your Business Afloat

Are you ignoring the warning signs that your business might be on the brink of insolvency? You’re not alone. We have the tips you need to steer your business out of troubled waters.

In this episode, Sally dives deep into one of the most pressing concerns facing businesses today — cash flow management and the alarming rise of company insolvencies in Australia. She breaks down the latest statistics from ASIC, revealing the sobering reality of the current business climate.

Whether your business is teetering on the edge or you want to ensure your operations stay afloat, this episode is packed with actionable advice on cash flow forecasting, managing accounts receivable and payable, budgeting, and recognising the early warning signs of insolvency.

Sally doesn’t just present the problem — she offers a clear, step-by-step guide on how to forecast cash flow weekly, enforce strict payment terms, and avoid common pitfalls like using the ATO as a bank. With practical strategies to optimise revenue and manage costs, this episode is a must-listen for any business owner looking to safeguard their financial future.

In this episode of Smarten Up! The Tax and Business Podcast, you'll learn:

Startling ASIC statistics on company insolvency (00:18)
The top 3 paths to insolvency: voluntary liquidation, court-ordered liquidation, and voluntary administration (02:10)
The technical definition of insolvency and what it means for your business when debts are overdue (04:06)
Red flags business owners should look out for before it's too late (04:36)
Cash flow forecasting dos and don’ts (08:04)
Managing your accounts receivable and how to ensure you get paid on time (09:38)
Managing your accounts payable and the importance of setting aside funds (13:43)
How to budget for business expenses and make tough decisions about cutting costs when revenue dips (17:55)
The balance between pricing increases and customer retention (21:25)
When and why you should rely on internal funds or finance assets, and the danger of using external finance for cash flow (25:46)
Why you should seek expert advice and not stick your head in the sand when facing potential insolvency (28:19)

This episode is a critical wake-up call for business owners to be proactive in managing their cash flow and recognising the signs of financial trouble. Remember, you’re not alone — thousands of businesses are facing the same challenges. Stay smart, stay informed, and always reach out for help when needed!

CONNECT WITH SALLY PRESTON