End of Financial Year Key dates for Small Business

DUE 22 June 2021

Superannuation is money a business pays for its employees to provide for their retirement.

As part of AAG Tax Planning Strategies, we encourage the business owner to pay Superannuation Guarantee (SG) by 22 June 2021 to obtain a tax deduction in this financial year (even though it is not due until 28 July 2021). This is to allow enough time for the super clearinghouse to process the payment.

To qualify for a tax deduction, your SG contribution payments for your employees must be made to your employees’ nominated super funds by the quarterly due dates for SG contributions.

DUE 22 June 2021

Superannuation contributions have a cap on the amount that can be a tax deduction for each employee in a financial year. For the 2020/2021 year, the limit is $25,000 for all ages.

If you want to make additional superannuation contributions up to your cap of $25,000, please ensure to do it by 22 June 2021.

Tax-Deductible Contributions to the superfund will be taxed at 15%, while your individual tax rate can go up to 47%, meaning a maximum tax savings of 32% for contribution.

(FBT) Reporting, Lodging and Paying DUE 25 June 2021

A fringe benefit is a ‘payment’ to an employee, but in a different form to salary or wages like allowing an employee to use a work car for private purposes, paying an employee’s gym membership, providing entertainment by way of free tickets to concerts, reimbursing an expense incurred by an employee, such as school fees, etc.

Employers must lodge a fringe benefits tax (FBT) return if they have a liability – also known as a fringe benefits taxable amount – during an FBT year (1 April to 31 March).

If you prepare your own FBT return, you can lodge up to 25 June without incurring a failure to lodge (FTL) penalty. The payment due date is 21 May.

If you have a tax agent that lodges your return electronically, the due date to lodge and pay is 25 June.

DUE 30 June 2021

• Review Accounts Receivables Ledger (Debtors) and write-off any bad debts
• Review Stock on Hand and write off obsolete stock
• Review Work in Progress
• Bring forward tax-deductible purchases such as repairs, accounting software, office expenses and donations
• Pay director’s fees or dividends and staff bonuses
• Defer Invoicing and receiving income
• Prepay expenses for up to 12 months, e.g. interest, insurance, rent, subscriptions and business travel
• Structure the Timing of Capital Gains and/or Losses
• Review your Division 7A Loans
• Review Personal Tax Deductions

Reporting DUE 1 July 2021

Single Touch Payroll (STP) is an initiative by the ATO that changes the way employers report on employee payments including salary and wages, PAYG withholding and superannuation.

From 1 July 2021, amounts paid to closely held payees will need to be reported through STP. If you’re a small employer you can report these amounts on or before each payday, or you can choose to report this information quarterly.

If you have any other payees (also known as arm’s length employees) they must be reported on or before each payday.

Click here for more details or contact us for assistance.

Finalisation of STP Reporting for 2021 Financial Year DUE 14 July 2021

Under STP, employers will send payroll information to the ATO simultaneously as they pay their employees, typically weekly, fortnightly or monthly via their payroll software.

You will need to finalise your STP information and send it to the ATO at the end of the financial year. This tells ATO that your data is complete, and ATO will change your employees’ income statement to ‘Tax ready’.

You may be exempt from giving payment summaries and a payment summary annual report for the amounts you reported through Single Touch Payroll (STP).  Instead, you make a finalisation declaration as part of your STP reporting.

You can make a finalisation declaration for an employee any time during the financial year (for example, for employees who have ceased employment), or after the end of the financial year up to 14 July.

• Employers with more than 20 employees have until 14 July 2021
• Employers with 19 or fewer employees have until 31 July 2021

DUE 14 July 2021

If you are reporting through Single Touch Payroll, you do not need to provide your employees with payment summaries.

Otherwise, under pay-as-you-go (PAYG) withholding, you must provide each of your employees, workers and other payees a payment summary showing how much you paid them for the financial year and how much you withheld from the payments during the financial year.

It is important you provide payment summaries to all your employees even if you were not required to withhold any tax.

The deadline to provide your employees with their payment summaries is 14 July 2021

Only required if you are not reporting through Single Touch Payroll.

Both June Payroll Tax and Annual Reconciliation are DUE 21 July 2021

Payroll tax is a state or territory tax that you have to pay when your total Australian wages are over the tax-free threshold for the relevant state or territory.

If you are required to report monthly or quarterly payroll tax, you will be required to do 2 reports by 21 July 2021:

• June quarter / monthly return; and
• Annual reconciliation returns

Click here to work out if you need to lodge Payroll Tax Return and here for more details.

Super Guarantee Obligation (if not paid before June 30) DUE 28 July 2021

Pay Superannuation Guarantee (SG) for the quarter ended 30 June 2021 by 28 July 2021 (if you didn’t pay before 30 June to get a tax deduction in the 2020/2021 year)

Annual Reports DUE 14 August 2021

Once you have issued PAYG Payment Summaries you must lodge a PAYG payment summary statement of all wages, salaries and other work-related payments to your workers, and the amounts withheld.

The PAYG Withholding Annual Report lodgement due date with the ATO is 14 August 2021.

Only required if you are not reporting through Single Touch Payroll

Taxable Payments Annual Report (TPAR) DUE 28 August 2021

From 1 July 2019 businesses in the Building and Construction, Cleaning, Courier, Security Industries or IT Services, who have paid for contractors throughout the year are required to lodge a Taxable Payments Annual Report (TPAR).

Your TPAR will be due for lodgement by 28 August 2021 and will report all contractors’ payments made during the 2021 Financial Year (1 July 2020 to 30 June 2021).

Click here to work out if you need to lodge a TPAR.

If your business falls under an industry that needs to report to the ATO and you think you need assistance to review contractors’ payments and/or lodging the TPAR, please get in touch.