Reportable fringe benefit changes – Salary packaged meal and entertainment facility leasing expense benefits

A reminder for employers that the existing reportable fringe benefits exclusion for meal entertainment and entertainment facility leasing expenses is removed from 1 April 2016, which will affect any employer who allows their employees to salary package these expenses. In addition, the exclusions for not-for-profit employers for salary packaged meal and entertainment facility leasing expense benefits are wound back with effect from 1 April 2016.

Employment in the small business sector

During March 2106, the House of Representatives Standing Committee on Education and Employment tabled its report into barriers for small business employment. From a tax perspective, the report’s recommendations included that:

  • work be done with the Australian Taxation Office to consider aligning the definitions of employee and contractor across Government agencies, and to develop a decision tool to help correctly identify when a worker is an employee or a contractor
  • the Government work with States and Territories to reduce reliance on payroll tax as a form of revenue
  • the Productivity Commission investigate the impact on small business of lowering the goods and services tax (GST) threshold on the importation of physical goods
  • the Government re-assess the policy case for taxing redundancy payouts of persons over 65 years of age.

Employer failed to meet superannuation guarantee obligations

In Payne and Commissioner of Taxation [2016] AATA 104 the Administrative Appeals Tribunal confirmed that employers have a statutory obligation to ensure the appropriate level of superannuation guarantee (SG) contributions are made on behalf of employees to a complying superannuation fund. The Tribunal considered whether an employer has met its SG obligations where payments were made by an employer to an employee where there was a clear direction that the employee should use the payment to fund their superannuation contributions. It was not accepted by the Tribunal that payment of SG contributions directly to an employee, rather than into a complying superannuation fund, would be treated as superannuation contributions for the purposes of meeting an employer’s SG obligations.

Amendments to the method of calculating the superannuation guarantee charge fail to pass

On 16 March 2016, the Government agreed to remove from the Treasury Legislation Amendment (Repeal Day 2015) Bill 2015, the relevant amending provisions designed to:

  • simplify the SG charge by aligning the earnings base for calculating the SG charge with the earnings base for calculating SG contributions
  • align the interest component on any SG shortfall with the period over which the contributions are outstanding
  • replace the SG charge penalty with the administrative penalty applied under the Taxation Administration Act 1953.

These proposals were included in the Bill when it was first introduced into the House of Representatives on 12 November 2015.