Tradies Guide to Managing Payroll and Tax Obligations

Managing payroll and tax in the construction industry is a unique challenge. With so many different employee types and award rates to navigate, managing and paying your labourers can be confusing and overwhelming.

Thankfully, our solutions experts are here to help you better understand and meet your obligations to employees, contractors and the ATO - including employee award rates, managing payment methods and using Single Touch Payroll.

Employee types and awards

As part of the Australian Fair Work Legislation, awards set out the minimum wages and conditions an employee is entitled to. As an employer, you need to ensure you are always paying your staff based on the correct award rates or you could be up for some hefty fines and penalties as well as some pretty unhappy staff.

Getting this right can be especially confusing within the trades industry due to the varying types of labourers that work on site and require different payment and reporting methods. For example, you are required to use Single Touch Payroll (STP) to pay your employees and declare their taxable income, while at the same time using an invoicing system to pay and track contractor fees.

Do I need to use Single Touch Payroll?

Yes, since the 30th of September 2019 STP reporting has been mandatory for businesses of all sizes. This means no more paper forms and manual payroll. Each pay cycle, you must be reporting your employees income, super and tax payments through STP enabled accounting software, like QuickBooks. Although the government provided exemptions to businesses in extenuating circumstances, these concessions ended on the 1st of July this year, meaning all businesses across Australia will be required to use STP.

If you’re struggling to understand how to manage your STP and tax obligations, our bookkeeping professionals can help get you on the right track to avoid incurring hefty fines and penalties. Book a free, no obligation consultation or call 1300 039 189 to chat to one of our solutions experts.