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Sunday 13 October 2013

Definition of Employment Status

There are 4 categories of employment:- Permanent Full Time, Permanent Part Time, Casual & Temporary.

Determining which category applies to your employees can be confusing.  Below is an explanation of each category.

Permanent Full Time Employees:

A full time employee is employed to work on an ongoing basis for an average maximum of 38 ordinary hrs/week.

Full time employees are entitled to all of the conditions of the National Employment Standards(NES) which include:
a Paid annual leave
a Paid personal leave        
a Public holidays
a Parental leave                
a Long service leave         
a Period of notice if terminating job

Permanent Part Time Employees:

A part time employee is employed to work a reasonably predictable number of hours & days during the week that is less than 38 hrs per week.

Part time employees are entitled to all of the conditions of the National Awards & NES (these are paid pro rate depending on the hours worked. Entitlements include –

a Paid annual leave         
a Paid personal leave        
a Public holidays
a Parental leave                
a Long service leave         
a Period of notice if terminating job

When hiring a part time employee you must come to an agreement with the employee in writing & this should include:                   
a Number of hours to be worked daily           
a specific days of the week they will work
a the start & finish time of each day            
a the specific times & duration of meal breaks or the regular pattern of engagement as agreed by both parties.       

 Any changes to this agreement must be made in writing.

Casual Worker:

A casual employee is someone that doesn’t usually have regular hours of work & is not guaranteed particular hours & is not on a regular roster.

They are paid for the hours of work they perform & receive a casual loading on their rate of pay giving them a higher rate.  This loading is to compensate them for not receiving some of the benefits of fulltime & part time workers and is usually 25%; You must check the relevant award for the exact rate.

Casual Workers are entitled to the following under the NES         
a 2 days unpaid carers leave per occasion     
a   2 days compassionate leave per occasion                 
a   Community Service leave (except paid jury service
a   Unpaid parental leave    
a   2 days unpaid adoption leave
a   A day off on public holidays unless asked to work by the employer
a A maximum of 38 hrs per week, plus reasonable additional hours

If you incorrectly classify a casual employee – Fairwork can require you to pay the employee annual/personal leave for the term of their employment & you cannot offset the casual loading already paid

Temporary Employee:

Temporary employees are engaged for a matter of days, weeks or months on a fixed term contract of for a particular purpose or project.  Workers engaged to replace permanent employees who might be on long service leave, maternity leave or workers compensation would also be considered to be temporary.  The key is that the job in not expected to be ongoing - there is no guarantee of work once the agreed project/purpose/replacement period is completed.


Award Finder:

A great toll to use for determining what your award states in regards to the above categories is the Award Finder on the Fairwork website.  This tool allows you to search for your award by job title, occupation, award code or industry.

High Income Threshold 2013/14

The new high income threshold for 2013-2014 is $129,300.00

The high income threshold affects 3 main entitlements:

1.   Employees who earn  more than the high income threshold and who aren’t covered by a modern award or enterprise agreement, can’t make an unfair dismissal claim

2.   Employees who are covered by a modern award and have agreed to a written guarantee of annual earnings that is more than the high income threshold, don’t get modern award entitlements.  However, they can make an unfair dismissal claim

  1.      The maximum amount of compensation payable for unfair dismissal is capped at either half the high income threshold, or 6 months of the dismissed employee’s wage – whichever is less

The information is taken from ‘The Association of Payroll Specialists’ newsletter.

Claiming the tax free threshold from more than one employer

If you have casual employee who work for other business as well – it is quite legitimate for the employee to claim the Tax Free Threshold from more than one employer.

If the employee is certain that their total income for the year will be less than the current tax free threshold of $18,200.00 then they can claim the tax free threshold from all their employers, therefore not paying any tax.

The important thing to remember here is that if the employee’s situation changes and they start earning more money and are likely to earn over the threshold amount in the year  THEY must notify their employers so that they can be taxed correctly.
If the employees circumstances change then they must complete a new Withholding Declaration (NAT 3093)

Tuesday 1 October 2013

Tax Office: Guide to Work-related travel expenses

The Tax Office guide 'Work-related daily travel expenses you can claim' assists individual taxpayers in differentiating the types of travel expenses that can be claimed as a deduction.
The Tax Office highlights that you can only claim travel expenses if they are directly connected to your work as an employee. These expenses may include:
  • Work-related car expenses;
  • Expenses for motorcycles and vehicles with a carrying capacity of one tonne or more, or nine or more passengers;
  • Actual expenses such as petrol costs;
  • Public transport and taxi fares;
  • Parking fees; and
  • Short-term car hire.
Generally, the cost of ordinary trips between home and work is deemed to be a private expense and thus an income tax deduction cannot be claimed. However the guide notes a particular exception for employees in the real estate industry, where certain situations may warrant these expenses to be deductible.

The guide explains that work related car and travel expenses are deductible when travel is:
  • Directly between two separate workplaces;
  • From your normal workplace to an alternative workplace whilst still on duty, and back to your normal workplace or directly home; and
  • From your home to an alternative workplace and then to your normal workplace or directly home.

Lastly, taxpayers may be able to claim the cost of using their car or vehicle between home and work if they are carrying bulky tools and equipment required for work. This is conditional upon transport to and from work being imperative rather than mere expedience and no secure area for storage exists at the employee’s workplace.

Click here to access the Tax Office's guide to work-related travel expenses.

Tax Office: GST food guide

The Tax Office has made available a GST food guide with the objective of assisting the retail food industry in establishing whether food sold is taxable or GST-free and making the distinction between food and non-food items.

The guide establishes 'simple rules' to be used as a reference when ascertaining GST-free and taxable food items. GST-free food includes but is not limited to the following:
  • Bread and bread rolls without a sweet coating;
  • Fats and oils for cooking;
  • Tea and coffee (unless ready to drink);
  • All meats for human consumption (except prepared meals or savoury snacks); and
  • Fruit, vegetables, fish and soup (fresh, frozen, dried, canned or packaged).
To address issues directly pertinent to the food retailing sector, the GST food guide outlines requisite criteria to be satisfied before GST law deems an item to be food for GST purposes.

Furthermore, the guide notes that GST legislation stipulates the sale of food to be GST-free unless it is:

  • Food for consumption on the premises it is supplied from;
  • Hot food for consumption away from the premises;
  • Food of a kind listed in clause 1 of schedule 1 of the GST Act;
  • Beverages and ingredients for beverages not listed in clause 1 of Schedule 2 of the GST Act; or
  • Food as listed in the GST law.
A detailed food list provides information with respect to the GST status on major food and beverage product lines. To access the GST food search function, click here.

Click here to access the GST food guide and detailed food list.