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May 2015 Contents
The undercover employee
The taxation of employment termination payments
Yes, you can claim GST credits for employee reimbursements
Being a 'non-resident' makes a difference for tax treatment
The undercover employee
The Tax office's ongoing compliance efforts have some constant focus. One of these is the often flawed characterisation of an employee as a contractor by businesses.
The mischief from the Tax Office’s point of view is the avoidance of employer obligations relating to the Superannuation Guarantee (SG) and Pay As You Go (PAYG) withholding.
Characterisation is fraught with elements of complexity. This is because of the differing definitions for tax and for superannuation purposes and the consequences which may follow if an incorrect classification is made.
For instance, entitlement to annual leave, sick leave and other benefits may arise. An employer’s liability to work cover and payroll tax in various states are also driven by this characterisation.
Notwithstanding these other issues, the actual employee/contractor characterisation relevant to PAYG and superannuation obligations are essential issues every business needs to be familiar with.
