BAS Agent’s Blog

Non-compliant Small Businesses to Face Monthly BAS Reporting

BAS Agent's Blog, Business Topics, GST & BAS / By / / , , , , , / 2 minutes of reading

The ATO has decided that small businesses with a history of non-payment, late or non-lodgement or incorrect reporting, will be moved from quarterly to monthly GST reporting i.e. a monthly BAS.

The ATO will begin this process from 1 April 2025 and will start with around 3,500 small businesses (and no, this is not an April’s Fool joke!). Those businesses affected will need to remain on the monthly cycle for a minimum of 12 months.

The ATO believes that this new protocol will help small businesses to comply with their tax obligations because they will need to be more organised in terms of bookkeeping to lodge a monthly BAS. The ATO also thinks that this will assist cash flow given business owners will need to pay smaller amounts more regularly.

If small business owners continue to ignore their tax debts and compliance obligations, it is not a question of “if” but “when” they will hear from the ATO. From the ATO Deputy Commissioner, Will Day:

‘We take our role seriously and are committed to supporting viable small businesses to comply with their ATO obligations, while also taking firmer action on those who are deliberately not complying to ensure they aren’t getting an unfair advantage. If you’re a small business who continues to deliberately disregard your obligations, you can expect the ATO to move you to more frequent GST reporting’.

The ATO will contact small business owners and their tax professionals if BAS reporting needs to move to a monthly cycle. There will be a review process in place for those small business owners who believe they do not have a history of non-compliance.

If you own a small business and are non-compliant, expect to move to monthly BAS lodgements soon. Contact your tax professional or the ATO ASAP to discuss, as the impact on your business finances and processes will be significant!

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ATO Super Clearing House to Close when PayDay Super Begins

BAS Agent's Blog, Payroll & Superannuation / By / / , , , / 2 minutes of reading

You may have heard that Payday Super is coming in July 2026. In short, Payday Super will require all employers to pay their employees’ super on the same day as a pay run is processed. The main reason behind this measure is that the Government wishes to end non-payment and underpayment of super by some employers as this is effectively wage theft. The measure will also mean that millions of employees will receive higher retirement savings due to their super contributions being paid earlier and more frequently.

What you may not know is that from 1 July 2026, the ATO Small Business Super Clearing House (SBSCH) will close. Yes, you heard right—it is closing its doors at the same time as Payday Super begins.

So, what can you do to prepare if you are a current SBSCH user? Your options are limited. You can either move to your default super fund’s clearing house or use the super functionality in your payroll software, such as Xero, MYOB, or QBO. I recommend not waiting until the SBSCH closes to get this organised. Make the change as soon as practicable.

How did I hear about the SBSCH closing? I read the fact sheet from the Government Treasury website. You can access the fact sheet here if you wish to read the details behind Payday Super.

The fact sheet breaks down many other details about Payday Super and is an important read if you are an employer. I suggest you take the time to review it and figure out how you will apply this change to your payroll processes when the time comes.

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Super to be paid on Paid Parental Leave

BAS Agent's Blog, Payroll & Superannuation / By / / , , , / 1 minute of reading

Good news has arrived for those planning a family in the next year or so. The government has decided to pay super guarantee equivalent payments on government-funded Paid Parental Leave (PPL). This will begin from 1st July 2025 i.e. for any babies born or adopted on or post this date. This measure is now law.

While Services Australia will continue to facilitate the PPL process, the ATO will be responsible for paying the super component (not employers). The ATO will pay the super in a lump sum at the start of the following financial year at the then super rate of 12% plus any interest owing. The first payments will be processed in July 2026.

This is a step forward in ensuring that those who choose to be stay-at-home parents are not disadvantaged in terms of future retirement savings. This is a good thing! A fairer system for all!

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New from Xero: reprocess failed or returned auto super payments

BAS Agent's Blog, Payroll & Superannuation, Xero / By / / , , , / 2 minutes of reading

Xero users who use the payroll function will be pleased to hear that an update has been released whereby failed or returned super payments can now be reprocessed.

Failed Auto Super Payment

If a super payment has failed, the payment authoriser will receive an email notification, outlining the reason for the failure. The status of the payment will change from “pending processing” to “failed”. When this happens, the payment can be reprocessed as the batch will become available for selection in the “Add Super Payment” screen again. Details of the steps required to reprocess failed payments can be found in the above link.

Returned Auto Super Payments

As for failed payments, the authoriser will receive an email if a super payment is returned with information about which employees are affected. Xero can’t tell you why the payment was returned so you will have to contact the super fund affected to obtain those details.

In Xero, the payment status will change to either “partially returned” or “returned”, depending on how many employees are affected.

To find out how to reprocess returned auto super payments, go to the link above.

My Thoughts?

I think this update is an improvement overall, however, the following details from the above link about the timing of the status change to “failed”, have me a bit concerned:

‘This can take up to five business days, with further delays during peak processing times, such as at the end of a quarter. While waiting for the failure message, you can’t update the status of the batch manually.’

Given that the ATO states that “contributions are considered ‘paid’ when they are received by the super fund not when they are paid to the commercial clearing house”, the delays as described by Xero could trigger a Super Guarantee Charge requirement depending on the payment dates involved. This will adversely affect the employer and his/her cash flow, given the SGC increases the super liability overall. This seems a little unfair especially if the employer did pay the SG in a timely manner (or thought he/she did!).

I guess, the only remedy here is to ensure that SG is paid as early in the month as possible so that if any payments are returned or fail, they can be rectified well before the super payment cut-off dates. This issue will become null and void of course, when Payday Super begins (I hope!).

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Casual Employment Rules have Changed!

BAS Agent's Blog, Payroll & Superannuation / By / / , , , , / 3 minutes of reading

On Monday 26th August 2024, changes to casual employment laws came into effect.

The changes include a new definition of a casual employee and a new pathway for employees to convert from casual to permanent employment.

Please note employees who are casual before the 26th of August, will remain casual under the current definition unless they choose to transition to full-time or part-time (permanent) employment.

New Casual Definition

A person will be a casual employee if:

  • there isn’t a firm promise of ongoing work and
  • he/she is entitled to a casual loading or casual pay rate under an award, registered agreement or employment contract.

Employees who begin as casuals will remain as casuals until their employment status changes either through a conversion process or by accepting alternative employment under a different status.

Casual Conversion – Employee Choice Pathway

There will be a new pathway for eligible employees to change to full or part-time employment. This will replace the current rules for changing to permanent employment and will be known as the  “Employee Choice Pathway”.

Under the new rules, eligible casual employees can notify their employers in writing of their intention to change to permanent employment. Employers can only refuse the notice for certain reasons (see below).

Casual employees can apply to move to permanent employment if:

  • they have been employed for at least 6 months (12 months if a small business) and
  • they believe they are no longer casual employees.

Employers must discuss this potential change to employment with the casual employee before committing to any change. The details of the changes must be worked through via this discussion. Then, employers must respond in writing within 21 days either accepting the change or not accepting it.

There are only a few reasons why a request to move to permanent employment can be rejected. These include:

  • the employee still meets the definition of a casual employee
  • there are fair and reasonable operational grounds that would negatively impact the business. Read more here about this here.
  • the employer is bound by a recruitment or selection process required by law and accepting the request would mean he/she is no longer compliant.

The current casual conversion rules will continue to apply to employers and casuals employed before 26th August 2024 for a transitional period. See those details here.

Reminder! Casual Employment Information Statement

There is a new statement to hand to all casual employees when they begin work. It must also be provided after 12 months of employment (small business employers) and for other employers, after 6 and 12 months, and then after every 12 months of employment. Download the statement here.

For further details about the changes to casual employment rules, go to the Fair Work website.

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Free Courses for Small Business from the ATO

BAS Agent's Blog, Business Topics / By / / , , , / 2 minutes of reading

The ATO has set up a website to help small business owners learn about running their businesses. It’s called Essentials to Strengthen your Small Business. The site covers the 5 stages of business life (from idea to exit) and offers 21 short courses across each stage. In this blog, I’ll walk you through this website so you can see if it’s right for you!

On the website, you’ll find courses linked to one of the 5 stages of your business: Idea, Start-up, Day to Day, Change, and Exit.

Idea: when you’re thinking about starting a business.

Start-up: when you’ve just begun and need guidance on what to do next.

Day to Day: when your business is running, and you want help with everyday management.

Change: when you plan to reshape or update your business.

Exit: when you’re retiring, selling, or closing down your business.

21 Courses

The 21 courses match the stage your business is in. They cover topics from starting a business to keeping records, closing down—and everything in between. For instance, clicking “Start-up” shows you 11 courses on GST, cash flow, record keeping, home-based business deductions, and more. You can filter by business structure and industry to find the most relevant courses.

Course Breakdown

Each course has an overview, a video, and modules you can do in any order. If some modules don’t apply to you, skip them. Every course has “fast facts” – key points from the lessons. There are also “quick links” for more info. After each course, take a knowledge check to see what you need to review. Plus, there’s an “action plan” –  a checklist to guide your next steps based on your learning. You can download the fast facts and action plan as PDFs or Word Docs to share or keep.

Course Account

Create an account on the website to track your courses. With an account, you can create a learning path that fits you and your business. Add or remove courses anytime from the course list. You can also save notes and favourite pages to visit later from your dashboard.

Here’s the video from the website that shows you how everything works, for those who like watching instead of reading!

This learning hub is perfect for small business owners looking for guidance without spending much time or money. It’s one of the best ATO initiatives I’ve seen recently.

For those who use the Cash Flow Coaching Kit, please note that it will be moved to this new Essentials website on June 30 2024.

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Client Agent Linking not working for you? Check your ABN details on the ABR now!

BAS Agent's Blog, Client Agent Linking / By / / , , / 2 minutes of reading

The Client Agent Linking (CAL) process is undoubtedly fairly cumbersome! There are several steps involved in nominating a new tax or BAS agent. The second step requires linking your MyGovID to your ABN. While that process should not be difficult, it is tripping up some because their ABN details have not been updated for quite some time.

The linking between a MyGovID and an ABN is done via the Relationship Authorisation Manager (RAM). This part of the process will not work if the ABN details differ from those currently recorded in the Australian Business Register (ABR). So, to avoid this barrier when trying to link to your new agent, make sure your ABN details are up to date. This is done in the following way:

  1. Log into the ABR (link above) and go to the “update your ABN details” page.
  2. Log into RAM (link above) using your MyGovID credential. Select “Update ABN Record”.
  3. Make any changes required in RAM. Note, that the only change you cannot make in RAM relates to business and legal names. This needs to be done through the ATO and ASIC.

If you cannot log into RAM and the ABR, you can do the following:

  1. Contact the ABR directly, here.
  2. Complete a mail-in form and send it to the ABR.
  3. Ask your tax professional to update the details for you.

If your entity is a Not-for-Profit organisation that needs to update your details before you can access ABR online services, follow these steps for assistance.

If you’re like most business owners, you set up your ABN years ago with a “set and forget” attitude. While many have gotten away with this (myself included!), not having up-to-date details for your ABN will be a major roadblock in the CAL process. It is worth mentioning that regardless of CAL, business owners should be updating ABN details within 28 days of any changes – see here! So, put this on your to-do list today – log into the ABR and check that your ABN details are current. Doing this will ensure that your CAL process goes smoothly.

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Why has my PAYG Withholding Cycle Changed?

BAS Agent's Blog, Payroll & Superannuation / By / / , / 2 minutes of reading

If you’re an employer, your PAYG withholding (PAYGWH) cycle might change depending on how much you withheld in the prior financial year. The ATO will advise you about this change in April each year via a written letter. The cycle change will occur on 1 July of the next financial year.

As a small withholder (small employer) you pay PAYGWH with GST and other taxes in your quarterly BAS. But, the ATO can switch your PAYGWH to monthly if, in the last financial year,

you withheld $25,001 to $1,000,000 from employee wages

These employers are called “medium withholders”.

If that’s you, you must lodge and pay a monthly Instalment Activity Statement (IAS) by the 21st of each month. For example, PAYGWH for July is due by August 21st.

If you withheld over $1 million last financial year, you’re a “large withholder”. 

Large employers have specific dates to pay PAYGWH and get special payment reference numbers (PRN). The ATO will provide you with these details. Remember, large withholders don’t report PAYGWH on their activity statement, but they should still match up their reported STP and paid amounts.

If the ATO changes your PAYGWH cycle, update your payroll software to meet the new deadlines.

If you think your PAYGWH for the next financial year will be below the thresholds mentioned above, you can ask to stay on your current PAYGWH cycle. You must do this within 14 days after getting the ATO’s letter about the cycle change. Complete this form and send it to the ATO (or your tax agent can help).

For more info, check out the ATO Annual Review of PAYG Withholding Cycles on the ATO website.

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Client Agent Linking – Useful Links, Videos & Phone Numbers

BAS Agent's Blog, Client Agent Linking, How To / By / / , , / 2 minutes of reading

In a previous blog, I discussed the challenges agents and clients face because of Client Agent Linking (CAL). Many of the issues encountered are related to setting up various digital identity software and/or not understanding the CAL process. In this blog, I will share useful links, videos and phone numbers to help those stumbling through this difficult task! 

As mentioned, the CAL process is complicated. It involves setting up a myGovID, linking the ABN to the myGovID in Relationship Authorisation Manager (RAM), logging into Online Services for Business (OSB), nominating a new agent and finally advising the agent that the nomination has occurred. The links to assist with setting up myGovID, RAM and OSB are below, along with a step-by-step guide to CAL both in written and video format. Some phone numbers are listed for those who prefer to call a human being! I hope this helps those who are struggling with CAL.

  1. How to nominate an agent in online services for business (download)
  2. The agent nomination process explained
  3. Troubleshooting guide for agents
  4. How to set up myGovID
  5. Online services for businesses
  6. Relationship Authorisation Manager (RAM)
  7. Link your myGovID to your ABN
  8. For agents – think before you link!

CAL – Useful Phone Numbers

  1. ATO – help with nominating an agent or with online services for business – 132866
  2. ATO – help with late lodgements and payments due to not being able to link to an agent – 1300 660 048
  3. ATO – agent can’t link a new client in online services due to a system error – 137286 (only call if the client has completed the nomination process)
  4. RAM – 1300 287 539 (select option 3 for RAM enquiries)
  5. myGovID – 1300 287 539 (select option 2, then option 1 for myGovID enquiries).

CAL – Useful Videos

ATO Client-To-Agent Linking Steps: How to nominate an agent in Online Services for Business

Client / Agent Linking – An ATO How-To Tutorial

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Wage Theft Legislation is Coming! Review your Payroll Now!

BAS Agent's Blog, Payroll & Superannuation / By / / , , / 2 minutes of reading

On 1 January 2025, Wage Theft Legislation will be enacted. This legislation is part of the Federal Government’s “Closing Loopholes” laws which effectively change the Fair Work Act.

Wage Theft Legislation will make it a criminal offence to underpay wages deliberately. Penalties could be $7.825 million or more for a company and $1.565 million or more for an individual and/or 10 years in prison. The Fair Work Ombudsman will be responsible for investigating possible wage theft cases.

These are very hefty penalties indeed. No one wants to be at the pointy end of these new laws therefore, in my opinion, reviewing your payroll set-up now and ensuring it is completely compliant, would be a good idea. To that end, conducting a payroll audit is necessary.

How to Audit Your Payroll Set-up

A payroll audit includes a review of payroll practices, systems and outcomes, all underpinned by complex regulations that vary at the federal, state and territory levels. It looks at employee classifications, pay rates, entitlements, and record-keeping.

The Fair Work Ombudsman has provided a step-by-step guide to auditing your payroll. You can download it here. The guide assists in reviewing payroll records, assessing the findings and finally, providing solutions for any issues raised.

Further to the above guide, the Australian Payroll Association recommends taking these 5 steps to assist with the audit process:

  1. Engage a Specialist – a payroll specialist can review your current set-up and identify any gaps or areas of risk that require addressing.
  2. Educate your Team – make sure your team is across the new Wage Theft Legislation. Provide training and education in any areas of payroll legislation in which your team are lacking.
  3. Leverage Technology – Modern payroll systems help avoid non-compliance issues. If your payroll technology is outdated or not up to par with Australian requirements, consider upgrading to a system that automates calculations and processes for better compliance.
  4. Document Everything – Ensure all payroll processes are well-documented and records are meticulously kept to prove compliance, aid transparency, and defend your organisation in disputes.
  5. Regular Reviews – Once your payroll is fully compliant, ensure regular payroll audits are conducted to catch and correct any discrepancies before they create significant issues.

With the introduction of Wage Theft Legislation, employers are encouraged to be proactive and conduct a thorough payroll audit to ensure compliance. Doing this now, and making it a regular process going forward, will ensure that employers are well-placed to avoid becoming embroiled in criminal proceedings and potential sanctions.

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