Why Give Importance To PAYG Payment Summary

All business owners have their own fair share of financial reporting woes and calculating payments for tax filing can be a nightmare. You may try avoiding this obligation, but it is part and parcel of running a business. You can be faced with numerous obligations as a business owner but you should always keep an eye on your PAYG (Pay As You Go) payment. Just because you have forwarded the payment does not necessarily mean you are off the hook. There will be instances when you need a copy of the payment summary and when it is not available, you will have a difficult time running through the payments you have made.

PAYG Statement

PAYG has two important tax topics: Pay As You Go Installments or PAYGI and Pay As You Go Withholding or PAYGW.  PAYGI refers to the tax installments that business owners make to the ATO. PAYGW refers to the tax you collect from the employees, payees and workers. As a general rule, employers or business owners are required to provide a summary to payees showing the amount withheld and the payment made based on the financial year.

The Importance of PAYG Payment Summary:

It provides a detailed summary of accounting information.

A summary of payment also includes relevant information of each payee. The tax numbers, tax liabilities, salary and earnings can be found in the summary. If the payee needs this information, it is available for access anytime. You may also need this information for generating financial report in the future and you don’t have to spend too much time harvesting this information.

It provides an easier process of filing taxes.

The tasks involved in filing taxes can be long and tedious. Aside from doing all the calculations, you have to make sure that the numbers are correct. You may have to redo the task once the data you encoded are incorrect. If organizing employee and accounting information takes a large chunk of your time, the summary of PAYG payment makes the process a walk in the park. The information you need for filing taxes is already available so you don’t have to enter them manually.

You generate reports faster.

Generating reports will be more efficient when you have a record of the payment summary. The process that used to take hours or even days to complete can be significantly reduced once you have PAYG payment summary. When less time is spent for generating reports, you can pay attention to other tasks without necessarily compromising on the quality of information that is present on your financial report.

Information on the payments made is clarified.

There can be a time when payees will ask for a copy of the payment they made and the payment summary will serve as proof. In case there are payment disputes, all you need to do is to refer to the summary for any clarifications. You can also spot irregularities or incorrect entries if you have a summary of the report. It will also help your payees understand why the deductions were made. When everything is recorded, you can remove any doubt and they are updated for under or over-payment.

Key Lodgment And Payment Dates

time-481450_1280Have you ever shouldered late fees and penalties as you were completely unaware of the important dates for payment and lodgment? While it is quite understandable that you are busy focusing on other aspects of your business, it is also important that you know the key dates especially when it comes to paying your taxes. Many business owners have gotten themselves into trouble due to late payments. It is essential to every business owner to take note of important payment and lodgment dates to avoid penalties. Your bookkeeper should see to it that you do not miss these following dates:

July 2016

21 July

Lodge and pay June 2016 monthly activity statement.
Lodge and pay 2015–16 quarter 4 PAYG instalment activity statement for head companies of consolidated groups.

28 July

Lodge and pay quarterly activity statement for quarter 4, 2015–16 – paper.
Pay quarterly instalment notice (form R, S or T) for quarter 4, 2015–16. Lodgment is only required if you vary the instalment amount.
Employers must make super guarantee contributions for quarter 4, 2015–16 to the funds by this date.
Employers who do not pay minimum super contributions for quarter 4 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly (NAT 9599) with us by 28 August 2016.

Note: The super guarantee charge is not tax deductible

31 July

Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 4, 2015–16.
Lodge Venture capital deficit tax return for June balancers.
Lodge Franking account return for 30 June balancers when there is an amount payable.

August 2016

14 August

Lodge the PAYG withholding payment summary annual report for:
large withholders whose annual withholding is greater than $1 million
payers who have no tax agent or BAS agent involved in preparing the report.

21 August

Lodge and pay July 2016 monthly activity statement.

25 August

Lodge and pay quarterly activity statement for quarter 4, 2015–16 – tax agents and BAS agents – if you are lodging using:
electronic lodgment service (ELS)
electronic commerce interface (ECI)
Tax Agent Portal
BAS Agent Portal
practitioner lodgment service (PLS).

28 August

Lodge the Superannuation guarantee charge statement – quarterly and pay the super guarantee charge for quarter 4, 2015–16 if the employer did not pay enough contributions on time.

Employers who lodge a Superannuation guarantee charge statement – quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They will still have to pay the remaining super guarantee charge to us.

Note: The super guarantee charge is not tax deductible

For help working out the super guarantee charge and preparing the Superannuation guarantee charge statement – quarterly, use our Super guarantee charge statement and calculator tool.

Lodge Taxable payments annual report – building and construction industry.

September 2016

21 September

Lodge and pay August 2016 monthly activity statement.

30 September

Lodge the PAYG withholding payment summary annual report for payers whose registered agent (BAS agent or tax agent) helped prepare the report.
If a payer has only closely held payees and their tax agent helps prepare their report, they may be eligible for a concession to lodge this report by the due date of their tax return.
Lodge Annual TFN withholding report 2016 when a trustee of a closely held trust has been required to withhold amounts from payments to beneficiaries.

October 2016

21 October

Pay annual PAYG instalment notice (Form N). Lodgment is only required if you vary the instalment amount or use the rate method to calculate the instalment.
Lodge and pay quarterly PAYG instalment activity statement for quarter 1, 2016–17 for head companies of consolidated groups.
Lodge and pay September 2016 monthly activity statement.

28 October

Lodge and pay quarterly activity statement for quarter 1, 2016–17 – paper lodgments.
Pay quarterly instalment notice (form R, S, or T) for quarter 1, 2016–17. Lodgment is only required if you vary the instalment amount.
Employers must make super guarantee contributions for quarter 1, 2016–17 to the funds by this date.
Employers who do not pay minimum super contributions for quarter 1 by this date must pay the super guarantee charge and lodge a Superannuation guarantee charge statement – quarterly (NAT 9599) with us by 28 November 2016.

Note: The super guarantee charge is not tax deductible

Lodge and pay annual activity statement for TFN withholding for closely held trusts where a trustee of a closely held trust withheld amounts from payments to beneficiaries during the 2015–16 income year.

31 October

Final date to appoint a tax agent to the income tax role for any new client. If you advise us of your appointment after this date, the client’s 2016 tax return may not be covered by your lodgment program.

Note: The lodgment program is a concession to registered agents. We can ask for documents to be lodged earlier than the concessional due dates.

Lodge tax returns for all entities if one or more prior year returns were outstanding as at 30 June 2016.

Note: This means all prior year returns must be lodged, not just the immediate prior year

If all outstanding prior year returns have been lodged by 31 October 2016, the system will reset the 2016 tax return due date as in the normal program.

SMSFs in this category must lodge their complete Self-managed superannuation fund annual return by this date.

Lodge and pay Self-managed superannuation fund annual return (NAT 71226) for new registrant (taxable and non-taxable) SMSF where we have advised the SMSF the first year return will have a 31 October 2016 due date.

Lodge tax return for all entities prosecuted for non-lodgment of prior year returns and advised of a lodgment due date of 31 October 2016:

Some prosecuted clients may have been given a different lodgment due date – refer to the letter you received for the applicable due date.
Payment (if required) for individuals and trusts in this category is due as advised in their notice of assessment.
Payment (if required) for companies and super funds in this category is due on 1 December 2016.

SMSFs in this category must lodge their complete Self managed superannuation fund annual return (NAT 71226) by this date.

Lodge Annual investment income report (AIIR).

Lodge Departing Australia superannuation payments (DASP) annual report.

Lodge Franking account tax return when both of the following apply:

The return is a disclosure only (no amount payable).
The taxpayer is a 30 June balancer.

Lodge PAYG withholding annual report no ABN withholding (NAT 3448).

Lodge PAYG withholding from interest, dividend and royalty payments paid to non-residents (NAT 7187) annual report. This report advises amounts withheld from payments to foreign residents for:

interest and unfranked dividend payments that are not reported on an Annual investment income report (AIIR)
royalty payments.

Lodge PAYG withholding annual report – payments to foreign residents (NAT 12413). This report advises amounts withheld from payments to foreign residents for:

entertainment and sports activities
construction and related activities
arranging casino gaming junket activities

Lodge lost members report for the period 1 January – 30 June 2016.

Lodge TFN report for closely held trusts for TFNs quoted to a trustee by beneficiaries in quarter 1, 2016–17.

November 2016

21 November

Lodge and pay October 2016 monthly activity statement.

25 November

Lodge and pay quarterly activity statement for quarter 1, 2016–17 if you are lodging using:
electronic lodgment service (ELS)
electronic commerce interface (ECI)
Tax Agent Portal
BAS Agent Portal
practitioner lodgment service (PLS).

28 November

Lodge Superannuation guarantee charge statement – quarterly and pay the super guarantee charge for quarter 1, 2016–17, if the employer did not pay enough contributions on time.

Employers who lodge a Superannuation guarantee charge statement – quarterly can choose to offset contributions they paid late to a fund against their super guarantee charge for the quarter. They will still have to pay the remaining super guarantee charge to us.

Note: The super guarantee charge is not tax deductible

For help working out the super guarantee charge and preparing the Superannuation guarantee charge statement – quarterly, use our Super guarantee charge statement and calculator tool.

December 2016

1 December

Pay income tax for taxable large/medium taxpayers, companies and super funds. Lodgment of return is due 15 January 2017.
Pay income tax for the taxable head company of a consolidated group with a member deemed to be a large/medium taxpayer in the latest year lodged. Lodgment of return is due 15 January 2017.
Pay income tax for companies and super funds when lodgment of the tax return was due 31 October 2016.

21 December

Lodge and pay November 2016 monthly activity statement.

Source: https://www.ato.gov.au

Australian Bookkeeping Dates To Remember

Deadlines are important to business owners especially when it comes to making payments. Aside from filing dates, both business owners and bookkeepers must also take note of tax deadlines. There are lots of problems associated with delayed payments and they can certainly have a serious impact on your business.

Annual Withholding Declarations: Employees can claim entitlement once they give their withholding declaration. After they claim entitlement, the amount being withheld from their wages are reduced. It is important that an employee’s information is updated once there are changes in their address or employment status. As a business owner, the declaration can also provide sufficient information about the changes made. The deadline for tax declaration is on August 14th. Business owners must make changes to the payments of employees from the very first payment upon receiving the declaration.

Pay As You Go Withholding: PAYG Withholding is the employee’s summary of payments. These payments are based on a specified period of time. Once your business makes a payment, the summary will show that amount withheld. If your business did not withhold any payments, it is necessary that the statement is presented. The deadline for PAYG withholding is 28 days after the end of the quarter or 21 days after the end of the month. The deadline will also depend on the type of system you have chosen.

Business Activity Statements: Tax obligations including securing business activity statements must be fulfilled by all Australian businesses. Every month, businesses must make payments and the deadline is 21 days after the last day of the month. For business owners who choose to pay on a quarterly basis, the payment must be lodged by the 28th day after the quarter. Payments are not due until February for the December quarter.

Superannuation: Superannuation includes the funds that will be available upon retirement. As an employer, it is your responsibility to set aside a portion of your employees’ wages as this will serve as a superannuation fund. The employees also have a choice to put additional funds into the account. Employers need to pay superannuation fees regularly. Making a payment can either be made on a quarterly or monthly basis. Superannuation payment must be lodged 28 days after the established period of time.

Payment Summaries: The summaries of payment provide the payment details made to employees. This type of payments that falls under this category is the payment an employer made under a voluntary agreement and labour-hire arrangement. The payment must be made on July 14th.