Employers must pay super contributions to a complying super fund for all eligible employees by the quarterly deadlines. These contributions are in addition to the employees’ salaries and wages, and must be calculated based on ordinary time earnings.

Employers also need to pay super contributions for contractors you pay under a contract for labour, because they are considered employees for the purpose of super guarantee. This includes contractors who quote an Australian business number (ABN).

The announcement on the continuation of the transitional concessional contribution cap from 1 July 2012 as part of the Government’s response to the Henry Tax Review recommendations has reinstated the importance of super splitting.

The Government has extended the transitional concessional contribution cap of $50,000 past 30 June 2012 to clients over age 50 but there is a catch. Your client’s superannuation account balance (including pension interests) must be less than $500,000.

For many years, the humble tax agent, who consistently and legitimately has been able to claim
$’000s more in tax deductions than taxpayers doing it on their own, has been a thorn in the side of
the Government and the Tax Office.
This is the background to the new ‘standard deductions’ and the Government’s and Tax Office’s
desire to try and elbow tax agents to the sidelines – tax agents claim too much and they don’t like
it.
So, taxpayers applauding the proposed introduction of ‘standard deductions’ may rue the day they

Henry Review – Update

On 2 May 2010, the Government released to the public, the “Henry Report” on the future of Australia’s taxation system. 

In all, there are 138 recommendations – more than 100 of which the Government has put its response to, on the “back-burner”, probably until after the next election.

Many of the recommendations will cost taxpayers dearly should they become law.  For example, recommendations still “live” include:

Taxing fringe benefits in the hands of employees;

Generally, motor vehicles provided to employees or their associates are subject to FBT if they are used or are available for private use.

Each year the ATO publishes a comprehensive but not exhaustive list of motor vehicles which may be eligible for an exemption from FBT.

The ATO stresses that vehicles that are included in the listing are not automatically exempt from FBT, but rather depend on whether the eligibility criteria for the exemption are met.

Beware of Identity Crime

Your Tax File Number (TFN) is a key part of your identity while you are in Australia.

It is an important form of identification when you start a new job, open bank accounts and apply for government benefits. Keep it secure.

Protect your identity by protecting all your personal details, including your TFN. Keep your passwords and TFN safe and never record or store them where they could be stolen, such as in your purse or wallet.

Employees who salary sacrificed into super in the lead up to 30 June 2009 to take advantage of the $100,000 and $50,000 concessional contribution caps which were halved from 1 July 2009 may unwittingly be hit with excess concessional contributions tax in the current financial year. 

UNIVERSITY undergraduates will be able to claim educational expenses as a tax deduction after a former student had a landmark win against the Tax Office in the Federal Court recently.

A former Australian Catholic University student, was successful in her bid to claim $920 as self-education expenses after fighting the Australian Tax Office through a number of jurisdictions over the past three years.

In the 2009 Budget, the government announced changes to the non-commercial losses rules. These changes will further restrict the deductibility of business losses incurred in relation to non-profitable business activities. The measure will ensure excess deductions from unprofitable business activities cannot be used to reduce salary, wage and other income of high income earners.