Glossary of Terms ASC Australian Securities Commission MDA Member Details Advice (form used for new members of VicSuper FutureSaver) ATO Australian Taxation Office OTE Ordinary Time Earnings BAS Business Activity Statement PAYG Pay as you go CONTRACTOR A contractor is an entity (such as individual, partnership, trust or company) that agrees to produce a designated result for an agreed price. PAYGW Pay as you go (Withholding) (GST) CRT Casual Relief Teacher PELS Postgraduate Education Loans Scheme DET Department of Education and Training RBL Reasonable Benefits Limit DHS Department of Human Services - Centrelink RFBA Reportable Fringe Benefits Amount EMPLOYEE A person who receives payment in the form of salary or wages in return for work or services, or payment for work under a contract that is wholly or principally for the person’s labour. RSA Retirement Savings Account EMPLOYER The person liable to make the payment to the employee (as above) SERBS State Employees Retirements Benefits Scheme ETP Employment Termination Payment SGL Superannuation Guarantee Levy FBT Fringe Benefit Tax SGC Superannuation Guarantee Charge FTB Family Tax Benefit SSF State Superannuation Fund GROUP EMPLOYER An employer responsible for the payment of salary or wages to an individual on a full/part time or casual basis TAX TABLES Table of rates setting out deductions to be made by employers from salary or wages of employees under PAYG system GST Goods & Services Tax TFN Tax File Number HECS Higher Education Contribution Scheme VSF Victorian Superannuation Fund HELP Higher Education Loans Program VWA Victorian WorkCover Authority HEI Higher Education Institutions WWC (E) Working With Children check for Employees. ISC Insurance and Superannuation Commission WWC (V) Working With Children check for Volunteers.
2. PAYG Processing Responsibilities 2.1 Legal Obligations Obligations to employees and other workers come from a variety of sources – federal, state/territory laws, industrial awards and agreements, tribunal decisions and contracts of employment (whether they are written or verbal). PAYG obligations as an employer are to: pay correct wages – within the pay period issue pay advice slips forward PAYG tax instalments to the ATO make appropriate payment under the Superannuation Guarantee Legislation report SGL payments to employees 2.2 Pay As You Go Withholding Schools will need to understand and apply the PAYG Withholding requirements to all locally paid staff and contract personnel. The Pay As You Go Withholding (PAYGW) system requires employers to withhold certain amounts from salary and wages each pay period, as supported by the employee’s TFN declaration and remit these amounts to the ATO through the BAS. 2.3 PAYG Withholding Tax Tables The current PAYG Withholding Tax Tables should be used to ensure the correct rate of tax is being withheld. These rates can be located and printed from the ATO website or alternately schools can access the online version of the tax withheld calculator also available from the ATO website. 2.3.1 Arrears Lump sum payments on arrears of salary or allowances should be treated as if the payment was being made as normal salaries i.e. tax instalments should be calculated at the rate that would have applied had the payments been received weekly or fortnightly over the period to which the arrears apply. The amount to withhold depends upon a number of factors including the period relating to the arrears payment. The ATO has issued a publication to assist employers in working out the amount of tax to withhold for payments of arrears and schools should review a copy of this publication – ‘PAYG Withholding tax tables – back payments including lump sum payment in arrears’ NAT3348, if they make payments of arrears. Such payments should be recorded on the employees Payment Summary and a letter explaining the arrears payment and taxing should be given to the employee for their use in negotiating their taxation liability with the ATO.