Super, payroll and other taxes
Businesses may have other tax obligations, including:
- superannuation guarantee
- payroll tax
- fringe benefit tax (FBT)
- capital gains tax (CGT)
- land tax
- transfer duty
- pay as you go (PAYG) instalments
- other taxes
Superannuation (also known as ‘super’) is money paid to staff to provide for their retirement. Generally, if you pay an employee $450 or more before tax in a calendar month you will have to pay super on top of their wages.
The minimum you must pay is the superannuation guarantee (SG).
- The SG is currently 9.5 per cent of an employee’s ordinary time earnings.
- You must pay SG at least four times per year, by the quarterly due dates.
- Payments must be made to a complying super fund. Most employees are eligible to choose their fund.
- Additional charges may apply if you don’t pay the SG on time.
Small Business Superannuation Clearing House
The clearing house allows you to pay your super contributions in one transaction to a single location. It is designed to make the payment process easier, reducing red tape and compliance costs.
The clearing house is a free online service for businesses that have:
- 19 or fewer employees or
- an aggregated turnover below $2 million.
TIP: All businesses must be compliant with SuperStream. The clearing house can assist you.
Payroll tax, administered by the Department of Finance, is a general purpose tax assessed on wages paid by employers in Western Australia.
From 1 July 2018, the tax is applied using a tiered rate scale. For most small businesses a tax rate of 5.5 per cent applies when your wages bill exceeds $1,000,000 per year (or $92,000 per month).
The Department of Finance has more information on payroll tax.
Employers pay FBT on some benefits provided to their staff, their staff’s families or other associates. The benefit may be in addition to, or part of, their salary or wages package.
Types of fringe benefits can include:
- allowing a staff member to use a work vehicle for personal use
- giving a staff member a low interest loan
- paying staff private health insurance costs
- providing entertainment such as food, drink or recreation to staff.
A capital gain or loss is the difference between the amount you receive when you sell an asset compared to what the asset cost you. Not all assets attract CGT. You declare your capital gain in your annual tax return.
As a small business operator, you will most commonly make a capital gain or loss when you sell one of the assets used in your business, such as premises, or when you sell your business, for example good will.
For small businesses that satisfy basic conditions there are a number of CGT tax concessions.
Land tax is assessed annually and is set by the State Government. It applies to land with a taxable value in excess of $300,000 that you own as at midnight on 30 June each year.
The Department of Finance has more information on land tax and how it is assessed.
Transfer duty is also a State Government tax and is payable on dutiable transactions including:
- transfer of business assets
- partnership interests.
The Department of Finance has more information on transfer duty.
PAYG instalments are paid to the ATO and go towards your expected end of year income tax liability.
Depending on the nature of your business you may also be liable to pay the following taxes: