School Level Payroll Requirements

School level payroll requirements Tax Superannuation WorkSafe

Financial Services Division

Published by the Communications Division for Financial Services Division Department of Education and Early Childhood Development Melbourne November 2013

The copyright in this document is owned by the State of Victoria (Department of Education and Early Childhood Development), or in the case of some materials, by third parties (third party materials). No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 the National Education Access Licence for Schools (NEALS) (see below) or with permission.

NEALS is an educational institution situated in Australia which is not conducted for profit, or a body responsible for administering such an institution may copy and communicate the materials, other than third party materials, for the educational purposes of the institution.

Authorised by the Department of Education and Early Childhood Development, 2 Treasury Place, East Melbourne, Victoria, 3002.

This document is also available on the internet at http://www.education.vic.gov.au/school/principals/finance/pages/default.aspx Contents

Version 4 Glossary of Terms

Member Details Advice (form Australian Securities ASC MDA used for new members of Commission VicSuper FutureSaver)

ATO Australian Taxation Office OTE Ordinary Time Earnings

BAS Business Activity Statement PAYG Pay as you go

A contractor is an entity (such as individual, partnership, trust Pay as you go (Withholding) CONTRACTOR or company) that agrees to PAYGW (GST) produce a designated result for an agreed price.

Postgraduate Education Loans CRT Casual Relief Teacher PELS Scheme

Department of Education and DEECD RBL Reasonable Benefits Limit Early Childhood Development

Department of Human Services Reportable Fringe Benefits DHS RFBA - Centrelink Amount

A person who receives payment in the form of salary or wages in return for work or services, EMPLOYEE or payment for work under a RSA Retirement Savings Account contract that is wholly or principally for the person’s labour.

The person liable to make the State Employees Retirements EMPLOYER payment to the employee (as SERBS Benefits Scheme above)

Employment Termination ETP SGL Superannuation Guarantee Levy Payment

Superannuation Guarantee FBT Fringe Benefit Tax SGC Charge

FTB Family Tax Benefit SSF State Superannuation Fund

GROUP An employer responsible for the TAX Table of rates setting out EMPLOYER payment of salary or wages to TABLES deductions to be made by an individual on a full/part time employers from salary or wages or casual basis of employees under PAYG

5Version 4 system

GST Goods & Services Tax TFN Tax File Number

Higher Education Contribution HECS VSF Victorian Superannuation Fund Scheme

Higher Education Loans HELP VWA Victorian WorkSafe Authority Program

Working With Children check HEI Higher Education Institutions WWC (E) for Employees.

Insurance and Superannuation Working With Children check ISC WWC (V) Commission for Volunteers.

6Version 4 electronic access to the Introduction material, this booklet is School Council Employment available on the School Part 2.3 of the Education and Training This booklet has been Financial Management Reform Act 2006 authorises a school prepared by the Financial website council to employ any person to do Services Division, http://www.education.vic.gov. anything it is authorised to do under that Act including the employment of Department of Education au/school/principals/finance/ casual relief teachers, education and Early Childhood pages/default.aspx support class employees and other Development non-teaching employees. (DEECD) to assist school The conditions of employment for councils and administrators school council employees are set out in Part 2.3 of the Education and to administer school level Training Reform Act 2006, Regulations payroll requirements and Ministerial Orders made under accurately and efficiently, that Act. whilst complying with Other relevant legislation includes the Public Administration Act 2004, State legislation, relevant policies Superannuation Act 1988, Accident and guidelines. Compensation Act 1985, Equal Opportunity Act 2010, Charter of Where further clarification is Human Rights and Responsibilities Act 2006, Working with Children Act 2005 needed, or queries arise, and the Fair Work Act 2009 (Cth). comprehensive details of contact names and For further information refer telephone numbers/ internet to the School Council addresses are provided Employment page on throughout the material, HRWeb. along with reference to various department publications.

Along with the process outlined in the CASES21 Process Guide – Section 7 Payroll module there are other vital functions, which must be addressed.

This booklet will assist school councils to ensure they adopt appropriate payroll procedures and practices to meet legislative and audit requirements efficiently and effectively.

Legislation governs the three major areas of responsibility in this booklet:

 Taxation,

 Superannuation and

 WorkSafe.

To ensure current and

7 Version 4 Agency Employed Casual Relief Teachers Agency employed CRT’s are not employees of the school council and therefore are not paid using the school level payroll.

It is the responsibility of the principal (as the school council’s representative) to ensure that only suitable and eligible persons are employed in the school. Prior to the engagement of a person as a casual relief teacher, the principal must be satisfied that the person meets the requirements.

The principal must ensure that all of the pre-employment requirements are met regardless of whether an employment agency is involved in the employment of the casual relief teacher.

For further information about the employment of casual relief teachers refer to the Casual Relief page on HRWeb.

Where the CRT is employed by the agency, full payroll and placement service is provided.

The agency is responsible for

 Taxation,

 Superannuation,

 WorkSafe

 Professional Indemnity and Public Liability Insurance

8 Version 4 who pays the employee the highest salary. 1. Taxation It is the employee’s In the case of a Casual responsibility to claim the 1.1 Tax File Number Relief Teacher or casual exemption only once. Declaration Education Support class a Tax File Number Declaration Tax File Number The Tax File Number must be completed at each Declarations must be sent Declaration requests the school; however the tax-free to the ATO within 14 days employee to state their Tax threshold can only be of the declaration being File Number (TFN) and claimed at one school. made. whether they wish to claim the tax-free threshold. Schools must report to the ATO within 14 days any Employees who do not new employee who has have a Tax File Number not provided a Tax File or do not know their Tax Number declaration. This File Number should obtain report is made by the an ‘Application/Inquiry school submitting a Tax Form’ from the Australian File Number declaration to Taxation Office and lodge the ATO, for each relevant it immediately. employee. The form will be unsigned (by the The employee then has employee) but must be 28 days to supply a Tax completed with File Number during which information known by the time tax should be school. deducted at the appropriate marginal rate, A Tax File Number i.e. Tax Instalment declaration remains in force Schedule column ‘with until: tax-free threshold’. • a staff member ceases If the TFN is not supplied employment with the within 28 days tax should school be deducted at the highest marginal rate of 46.5% (as • a staff member’s shown in column ‘no tax circumstances change file number’ of the Tax Instalment Schedule – • the Australian PAYG Withholding Tax Taxation Office Tables) from the first requires employees to payday after the 28-day complete a new period. declaration.

Employees may have a Information relating to the Tax File Number Tax File Number Declaration Declaration with more can be located on the ATO than one employer but website at www.ato.gov.au. cannot claim the tax-free threshold from more than one employer at any one time. The tax-free threshold is normally claimed from the employer 9 Version 4 1.2 Tax File Numbers and Superannuation Requirements The employer must provide the employee’s nominated superannuation fund with the TFN within 14 days of commencement of employment. This assumes that the TFN has been quoted for employment purposes.

Schools using the CASES21 VicSuper data file only need to enter the TFN into their CASES21 system and it will automatically be passed to VicSuper with the next SG payment file.

Tax er Declaration - File Flow Chart Numb

10 Version 4 1.3 TFN Withholding 1.4 Storage and disposal of Declaration TFN information A Tax File Number The tax law provides severe Declaration (NAT 3092) must penalties for the misuse of be provided to an employer Tax File Numbers. School before a Withholding councils must make Declaration can be made. themselves aware of their A Withholding Declaration obligations under the Privacy (NAT 3093) is to be Act. completed by the employee Privacy Act 1988 – to authorise an adjustment to the amount withheld from Under the TFN guidelines in payments. the Privacy Act you must use secure methods when This form is used by the storing and disposing of TFN employee to: information.

• advise of a change to a The Privacy Hotline tax offset or family tax telephone number is benefit entitlement provided in the Contacts section of this booklet. • claim the tax-free threshold with one Retaining declarations – employer and discontinue claiming the Under tax laws if a payee threshold with other submits a new tax file employers number declaration or leaves your employment, you must • advise that they have retain a copy of the original become, or are no longer declaration for the current an Australian resident for and the next financial year. tax purposes or TFN declaration forms must • advise the employer of be stored in a secure place changes to the Higher away from the personnel file. Education Loan Programme (HELP) or Financial Supplement repayment obligations.

Withholding Declarations are to be retained by the employer.

Further information regarding Withholding Declarations is available from the ATO. Such payments should be 2. PAYG 2.3 PAYG Withholding Tax recorded on the Tables employees Payment Processing Summary and a letter Responsibilities The current PAYG explaining the arrears Withholding Tax Tables payment and taxing 2.1 Legal Obligations should be used to ensure should be given to the employee for their use in Obligations to employees the correct rate of tax is negotiating their taxation and other workers come being withheld. These rates from a variety of sources – liability with the ATO. federal, state/territory laws, can be located and printed industrial awards and from the ATO website or agreements, tribunal alternately schools can decisions and contracts of access the online version of employment (whether they are written or verbal). the tax withheld calculator also available from the ATO PAYG obligations as an website. employer are to:

 pay correct wages – 2.3.1 Arrears within the pay period Lump sum payments on  issue pay advice slips arrears of salary or allowances should be  forward PAYG tax treated as if the payment instalments to the ATO was being made as normal  make appropriate salaries i.e. tax instalments payment under the should be calculated at the Superannuation Guarantee Legislation rate that would have applied had the payments been  report SGL payments to received weekly or employees fortnightly over the period to 2.2 Pay As You Go which the arrears apply. Withholding Schools will need to The amount to withhold understand and apply the depends upon a number of PAYG Withholding factors including the period requirements to all locally paid staff and contract relating to the arrears personnel. payment. The ATO has issued a publication to assist The Pay As You Go Withholding (PAYGW) employers in working out the system requires employers amount of tax to withhold for to withhold certain amounts payments of arrears and from salary and wages each schools should review a pay period, as supported by the employee’s TFN copy of this publication – declaration and remit these ‘PAYG Withholding tax amounts to the ATO through tables – back payments the BAS. including lump sum payment in arrears’ NAT3348, if they make payments of arrears. Flow Chart PAYG responsibility 2.7 Labour hire agreements 2.9 Status of a Worker 2.4 Employee Requested This provides for 2.9.1 Employee/Contractor Additional Tax Withholding by a labour hire Deductions firm (for example, an A school council needs to ascertain the correct status An employee may request Employment Agency), from of a worker as this affects additional tax to be payments made to the taxation obligations of deducted from their salary. individuals for work or the employer. There are Any such request must be services supplied to a third two categories of workers: in writing and remains in party and made under a labour hire arrangement. force until withdrawn in • Employees: The Pay As writing by the employee. In the instance where the You Go Withholding school contracts with the system applies to these 2.5 Higher Education Loan employment agency to workers and schools are Programme (HELP) arrange a worker to provide required to deduct tax from their salary/wages. Staff with an accumulated services, the contract between the school and the HELP/ HECS/PELS debt • Independent employment agency would must advise their employer Contractors: The Pay As be a taxable supply and that they have a debt You Go Instalment system GST would apply. The through the lodgement of applies to these workers employment agency their Tax File Number and schools are generally engages the worker and declaration. not required to deduct must withhold the relevant amounts from the Employees are not required amounts of payment from payments unless an ABN is to tell their employer the the worker and remit the not quoted. If an ABN is not amount of the debt. amount to the ATO. The quoted then the schools will Withholding obligation withhold amounts at W4 Once a staff member’s applies to the employment under the PAYG income reaches the agencies not the school. repayment threshold, their Withholding system. employer is required to A formal agreement should An employee/contractor withhold additional amounts be signed by both parties decision tool is available on to cover their anticipated stating the obligations of the the ATO website. The compulsory repayment. employment agency relating decision tool can assist in to payroll, superannuation determining the status of and WorkSafe. 2.6 Variation to Tax an employee/contractor for Withholding deductions taxation, superannuation 2.8 Seniors and Pensioners Authority to use Special Daily and WorkSafe purposes. Tax Offset Rates S1515. The Seniors and Pensioners When engaging a contractor, ensure that there is a written Some salary and wage Tax Offset is a tax offset earners may wish to apply available to anyone who Contractor Agreement for special tax rates meets certain eligibility between the contractor and because of special conditions. the school. Consult the legal circumstances. One of the services website for the reasons for application may The tax offset allows senior correct standard agreement be because the person is Australians to earn more located at employed on a casual basis income before paying tax https://edugate.eduweb.vic.g at more than one school. and the Medicare levy. In ov.au/Services/legal/Pages/d some cases it will result in efault.aspx The employee can obtain no longer having to lodge a the forms from the ATO by tax return. Information can Deciding the status of a telephoning the PAYG be obtained by the worker can sometimes be Enquiry Unit on 1300 360 employees from the ATO. difficult. The Department’s 221 or forms can be Tax Compliance Unit can accessed electronically assist if you are in doubt or through the ATO website need further details www.ato.gov.au concerning PAYG Instalments or PAYG Once the BAS has been Withholding. 2.10 Method of Payment submitted a receipt number will be provided. Print the School council employees receipt and the final BAS and can be paid directly into their retain for audit. bank/financial institution account or by cheque. 2.12.2 Lodgement dates Payment by cash is not Key lodgement dates allowed. including BAS, PAYG, Further information can be superannuation, etc for obtained from the CASES21 businesses including schools Process Guide – Section 7 - can be found at the Payroll available at Australian Taxation Office http://www.education.vic.gov. website at Key Lodgement au/school/principals/finance/p Dates for Businesses. ages/default.aspx Where a due date falls on a day that is not a business day 2.11 Payment of PAYG (that is, the due date is a Schools report employees’ Saturday, a Sunday or a Pay As You Go (PAYG) public holiday), lodgement or payments and gross payment may be made on earnings via the school the first business day after Business Activity Statement the due date. (BAS). In order to lodge a The only exception is the BAS, schools require an December BAS due 21st ABN registration. January which can be lodged within the first two weeks of 2.12 Business Activity February. This exemption is Statement (BAS) available to all schools A BAS is the single form providing approval has been schools complete and granted by the ATO through return to the ATO to a submission from the report obligations and Departments’ Tax entitlements relating to: Compliance Unit.

• GST 2.13 PAYG End of Financial • Pay As You Go (PAYG) Year amounts withheld from Schools must issue payment payments to employees summaries to employees on or withheld from an annual basis no later than contractors 14 July each year.

2.12.1 Electronic BAS 2.14 Preparation of Payment Schools are able to prepare Summaries their BAS using CASES21 Finance and transmit it A Payment Summary must electronically using the be issued to all employees internet. who are paid through the school level payroll as well as The final BAS is prepared by any creditors who have had CASES21 Finance, printed tax withheld from payments. and the figures entered Where tax has not been manually into the ATO online withheld for example, 100% Business Activity Statement salary sacrifice (before tax) located in the ATO Business for the entire financial year, a Portal. www.ato.gov.au payment summary will be issued to include the Manual submissions to the 2.17 d to that from Reportable Superannuation ATO require the following: Fri employe eligi Contributions. ng e in the ble • original copies of e FBT car The reconciliation of payment summaries Be year (1 park accumulated financial year issued to each employee nef April to ing tax instalments with payment and its 31 exp summaries must be Ta March) ens • a reconciliation statement completed before payment x where e signed by the principal summaries are issued to an the pay reconciling the total employees or creditors. d gross men amount of any Re taxable ts Payment summaries are to deductions shown in por value of and be treated with confidentiality each of those original tab the and security at all times. copies of payment le fringe • summaries with the total Any payments made after the Fri benefits of the amounts paid to ente end of the financial year, ng is the ATO in respect of rtain even for work completed e greater those deductions men before the end of the year, Be than t by should be included on the The manual submission nef $2,000. way following financial year’s should be sent to Reply Paid its This will of payment summary. 923. Albury NSW 2640. A apply to mo the food unt school and 2.16 Payroll Tax (R level drin Victorian State FB payroll if ks 2.15 Annual ATO and Responsibilities Government Schools are A) employe es are ben The school council must exempt from the Victorian From 1 efits April, provide reconcile payment Government Payroll Tax for d with ass summaries and report to the 2007 ocia school council employees employe taxable ATO no later than 14 August benefits. ted each year. (effective from 1 July rs have with 2005). been Fringe ente Electronic submissions to the required benefits rtain ATO require the following: to which men include, are t • EMPDUPE file prepared on an exclude suc by CASES21 Payroll employe d from h as Module refer to Section 9 e’s the trav - End of Financial Year paymen paymen el guide. t t and summar summar acc • a Magnetic Media y, the Information EA form y om amount reportin mod (which can be of downloaded from the g atio grossed require n. DEECD Tax Compliance up Unit website) ment fringe include: The School’s should submit the benefits above EMPDUPE file electronically (referre • car fringe through the ATO’s Business d to as park benefits Portal or mail the file on Reporta ing will still disk/cd together with the EA ble fring be form to Magnetic Media Fringe e subject Processing, Reply Paid 923, Benefits ben to FBT. Albury NSW 2640 or efits RFBA) asid Schools or provide e will need to resourc Tax question example 5 cents. ll the refer to keep es and (FBT) 8 on the , a Should The school the detailed informat return is Tax File person the level CASES records ion also followin of fringe related required Number is a employe g table payroll. 21 benefits to FBT if Declarat non- e supply contains Finance provide that can applicab ion ‘Are resident a Tax a For Busines d to an facilitate le. you an if they File checklis informat s individu improve Australi are in Number ion and Process al and d FBT Deducti t of any reportin ble/non an Australi , they schools’ instructi Guide benefits g by -FBT resident a on a must be responsi ons on Section benefit provide schools. for working taxed bilities processi 7: d to It should s taxation holiday. under when ng the Payroll. associat be These purpose Further the Non school es of noted paying are the that s?’, informat Residen employe level items employe FBT non- ion t Tax payroll which es on es such Tracker are resident regardin Table as records allowabl tax rules g non- which is spouse FBT e apply residenc included or child. details deductio (These for and y status as part ns to will also employe he/she should of the the be es paid employe cannot be PAYG included on r and claim obtaine Withhol on the central are not the tax- d ding paymen payroll. subject t If a free directly Tax to or are summar school threshol from the Tables. exempt y of the provides from d or any ATO. employe fringe FBT. depend 2.19 e). benefits The If a non- Ta to ent most resident x FBT employe rebates. commo Ch Tracker es paid employe nly ec is a on the e has package Non- klis Depart school d item in resident not t ment of level this supplied for Educati payroll, means categor Pa on and they will a a Tax y is yin Early need to person File superan g Childho keep Number nuation. who E od their does , tax mp Develop own must be loy ment records 2.18 not ee online relating No meet deducte s FBT to FBT. n d at the the on recordin The Re highest definitio the g tool FBT sid n of tax rate Sc that is Tracker ent and the ho located can be s ‘resident ol on the used as ’ as total If an Le DEECD a guide. applied deductio Tax Unit employe vel by the n website An e has Pa rounded annual answere ATO. yro This tool to the Fringe d NO to For provides Benefits nearest School Level Payroll – Tax Checklist Process Located in this guide Section

Step 1 School obtains an ABN ABN Registration 8.1

Step 2 Issue Tax File Number Declaration to the Employee Tax File Number Declaration 1.1

Step 3 Process completed and signed Tax File Number Declaration Tax File Number Declaration 1.1

Step 4 Note TFN enquiries for further action Tax File Number Declaration 1.1

Step 5 Ensure you have advised trustees of relevant Tax File Numbers and Superannuation 1.2 superannuation funds of employee’s TFN Requirements

Step 6 Calculate employee’s tax instalment deduction according to Variation to Tax Deductions 2.6 Tax File Number Declaration form and using the appropriate table Higher Education Loan Programme (HELP) replaces Higher Education Contribution 2.5 Scheme (HEC) PAYG Withholding Tax table 2.3

Step 7 At the end of each month/quarter reconcile PAYG Business Activity Statement (BAS) 2.12 deductions made during previous period and remit to ATO

Step 8 At the end of the financial year reconcile PAYG PAYG End of Financial Year 2.13 deductions and issue Payment Summaries Preparation of Payment Summaries 2.14

Annual ATO Responsibilities 2.15 Step 9 By 14 August send to ATO original copies of Payment Summaries (manual) or mail electronic disk and reconciliation statement deduction for travel 3. Allowances 3.2 Travel Allowances expenses in their individual ATO PAYG Bulletin No 1 income tax return. This may 3.1 Allowances details the taxation offset any income tax Allowances may be treatment of cents per liability that may accrue payable to an eligible kilometre travel from reporting the employee. reimbursement. allowance as income. Allowances should be These travel allowances added to an employee’s are required to be reported The cents per kilometre normal earnings and tax on the employee’s annual payments for all employees instalments are based on payment summary. paid on the school level the total amount. Some payroll must be included on allowances are also The allowance is NOT CASES21 payroll. included as salary for the included in gross salary for purpose of determining presentation on the superannuation employee’s annual contributions and payment summary. entitlements. Employees should read the Allowances must be taxed text under the gross income unless approval not to tax (it specifically states that it has been given by the excludes allowances ATO. reported in the boxes). While there are very few allowances that are non- For travel claims up to taxable, caution should still 5,000kms, travel be exercised when allowances are to be determining what is and treated as a non taxed isn’t taxable. For example a allowance so no tax is to be travel allowance for a claim deducted from these less than 5,000 kms is non- amounts. taxable, however a travel allowance for a claim Travel reimbursements greater than 5,000 kms is above 5,000kms should be taxable – see 3.2. taxed at the employee’s marginal tax rate (as this calculation relies upon using the cents per kilometre method). The employees are required to report the amount of the allowance in their personal income tax return.

Employees may also be able to claim a tax employees including: The objective of salary 4. Deductions • making financial packaging is to maximise decisions based on flexibility for individuals to Deductions from a staff before tax dollars not meet their personal and member’s salary must be after tax dollars authorised by the staff financial needs while at the • allocating salary and same time ensuring that the member in writing and kept optional benefits to suit on file. A staff member who individual financial and benefit arrangements requires a salary deduction personal situations. comply with relevant e.g. personal taxation legislation and superannuation, should rulings. contact the relevant fund School council employees and complete a deduction (including CRT’s) can only authority form supplied by participate in salary the fund. packaging with school council approval. A staff member may at any time request that a Fringe Benefits Tax (FBT) deduction be ceased. Such was introduced in 1986 to a request must be provided tax the value of fringe in writing. benefits provided by an employer to an employee 4.1 Garnishee or Court or associate (related third Order party) in place of or in A court order may be addition to the employee’s served on an employer (the salary or wages. FBT is ‘garnishee’) to deduct a payable by the employer. specified amount from an However any FBT costs employee. Compliance with incurred by the department the terms of a court order is will be passed on to the required. employee and met from the employee’s salary package. 4.2 Child Support 4.3.1 Superannuation Salary The ATO through the Child Sacrifice Support Agency (CSA) Superannuation which administers the Child contributions can be an Support Scheme may attractive salary package require an employer to item as it provides deduct maintenance employees with the payments from an opportunity to boost their employee’s salary retirement savings with tax payments. concessions

4.3 Salary Packaging There is no FBT payable on Salary packaging offers a superannuation range of advantages to contributions made by an employer (or associate of All requests for salary an employer) for an sacrifice contributions must employee, except if paid to include the superannuation a non-complying funds membership number superannuation fund. and the amount to be paid to the fund.

This information must be in writing and forwarded to school council for approval. Once approved the request must be retained in the employee’s personnel file.

A staff member may at any time request that the deduction be ceased. Such a request must also be provided in writing and kept on file. 5. Superannuation School councils as • payments made under Requirements employers must meet the the Community Development Superannuation Guarantee Employment Program 5.1 Superannuation requirements for the (CDEP). Guarantee Act following employees: The Superannuation 5.2.2 Enquiries • Casual Relief teachers Guarantee For queries regarding the (Administration) Act 1992 • staff employed on a Superannuation Guarantee call the Superannuation requires employers to casual, part or full time basis regardless of Guarantee Hotline at the pay contributions to a whether they have ATO on 13 10 20 or complying superannuation cover VicSuper on 9667 9665. superannuation fund, provided by another employer. 5.3 Choice of Fund (such as the VicSuper Fund), on behalf of each • early childhood staff Since 1 July 2005, most employee. employed under employees are able to VECTAA (conditions choose the superannuation The Superannuation apply check the fund to receive the employer Guarantee Act defines an agreement) compulsory payments for employee as: School council is not Superannuation Guarantee. required to pay ‘An individual who Superannuation Guarantee received payment in the contributions in the following To ensure compliance with form of salary or wages in cases: the Act schools will need to return for their labour or • Casual and part time determine which employees services. Also an employee, less than 18 paid on the school level years old working less employee is someone payroll are eligible to be who receives payment for than 30 hours per week offered Choice of Fund. work under a contract • employees who are paid less than $450 in a Refer to ATO website. wholly or principally for month regardless of the labour’. period over which the Due to the nature of their payment accrued, employment casual relief 5.2 Superannuation including staff employed teachers (CRT) are Guarantee Provisions under the Children’s Services Award 2010. considered for the 5.2.1 Compulsory • where an incorporated purposes of the Act as Superannuation company, regardless of Guarantee Contributions ‘new’ employees each the number of employees Generally if an employee is or contracts is engaged time a school employs paid $450 or more in a by the school council them regardless of month the employer is • where a school council whether the CRT has obliged to make has contracted with an previously been unincorporated contractor superannuation employed by the school. • if a partnership contributions on their Where the employment of (unincorporated behalf. This is called contractors) enters into a the CRT does not exceed Superannuation Guarantee contract with a school 28 continuous days of (SG). Currently the council and the contract employment then schools is with the partnership minimum rate that must be and not a particular are not required to contributed is 9.25%. person provide a standard Choice form to the CRT. Guarantee, expressed as a Where a school employs percentage of an employee’s staff on an annual basis gross salary, is 9.25%. involving ad hoc attendance, schools are to provide a Standard Choice form to these employees.

5.3.1 Default fund The Act requires the employer to appoint a default superannuation fund to receive the compulsory employer superannuation contributions for those employees who do not exercise choice. The Secretary has appointed VicSuper Pty Ltd as the default fund for the Department including school councils.

5.3.2 Application to become a ‘Participating Employer’ Some superannuation funds require an employer to apply to become a ‘participating employer’ to enable the fund to receive employer contributions. Any school that receives a request to sign an application form is not to sign the form. The matter is to be referred to the Department’s Superannuation Officer located within Payroll Services on 9637 3274.

5.4 Employer Contributions The minimum level of superannuation cover under the Superannuation notice, including made by the required date, 5.5 Ordinary Time Earnings redundancy payments schools should: The rate of employer • annual leave, sick leave 1. Make the payment to the contribution is only applied to or long service leave superannuation fund paid on termination of the Ordinary Time Earnings immediately as it can be employment used as an offset against (OTE) of each employee. • fringe benefits subject to the superannuation OTE include: fringe benefits tax. guarantee charge liability. • amounts paid in If schools are unsure of an 2. Contact the ATO 13 10 20 recognition of services and request the SG Late rendered – award issue regarding ordinary time Payment Offset form(s). wages earnings (OTE), further • annual leave, sick leave clarification should be sought 3. Complete the SG Late Payment Offset (LPO) or long service leave from the ATO website. paid in employment form(s) (one per person) and submit it/them to the • allowances which are not 5.6 Late Payment of SG ATO along with the penalty reimbursement of Schools are required to interest (10%) and the expenses for example, ensure that all SG administration fee. Only first aid allowance send the ATO the SG payments have been • WorkSafe payments amount if you have not including top up received by the super fund paid it to a complying payments paid by an prior to the quarterly cut-off super fund. employer for hours of date. This generally means work performed The ATO will keep the making payments at least 2 administration fee and • casual and shift loadings – 3 days before the due forward the penalty • government subsidies if date. If you are making a on-paid to employees interest to the payment on the last day of superannuation fund for • over award payments. the quarter it must be via crediting to the individuals BPAY, EFT or direct debit account. OTE exclude: (check with the super fund • overtime first for the fastest method For more information on of making payments). • reimbursement of LPO, visit the ATO expenses (e.g. travel) Cheques will take an website at • WorkSafe payments additional 2 days to arrive www.ato.gov.au/ including top up and this will mean you miss • select - Businesses payments when no work the quarterly cut-off date • then ‘Paying super is performed and are liable for the SG for your employees’. • payments when on charge. maternity and paternity • Under the ‘table of leave When a quarterly cut-off date contents’ select ‘What you for payments falls on a • paid parental leave weekend or public holiday must do if you haven’t • annual leave loading the due date is the next met your obligations’, or working day. • contact VicSuper – • ex gratia payments and/or Christmas The SG charge is made refer to Section 9 – bonuses up of the SG payment Contacts. • top-up payments when amount, penalty interest It should also be noted that serving on jury duty or and a $20 per late person failure by a school to submit with reserve forces and administration fee. Superannuation Guarantee so on contributions by the quarterly • payments in lieu of If the payment has not been cut-off date may also result in a loss of insurance benefits for an employee.

SG quarter Cut-off date for payment of SG

1 July – 28 October 30 September

1 October – 28 January 31 December

1 January – 28 April 31 March

1 April – 28 July 30 June Guarantee requirements the 5.6.1 Superannuation Guarantee employer must pay the Charge 5.8 Complying Superannuation contributions: Fund The Superannuation • to a specified fund if they Superannuation Guarantee Guarantee Charge is made have an award obligation or contributions must be made to up of three components: a complying fund such as the • the total of all employees’ • into a complying VicSuper FutureSaver individual superannuation superannuation fund or guarantee shortfalls (this is retirement savings account A complying fund operates in calculated by multiplying (RSA). accordance with standards set the employee’s total salary by the Government. Schools or wages, not ordinary can telephone the Australian times earnings, paid in the Prudential Regulation Authority quarter by the employee’s on 1300 13 1060 or the ATO individual shortfall on 13 10 20 to ascertain percentage) whether a fund meets these standards. • a flat interest component (currently 10%) on the All new teaching and public shortfall from the beginning sector staff employed from 1 of the contribution year to January 1994, including casual 14 August after the end of employees, who are not that year i.e 410 days or members of any other public 411 days in a leap year or sector superannuation fund, the date you lodge your will become members of Superannuation Guarantee VicSuper FutureSaver unless Statement whichever is eligible employees provide the later employer with a correctly completed Standard Choice • an administration fee of Form. $20 for each employee for Refer to DEECD Circular whom there is a shortfall. C209/2005 – Implementation of Should the contributions not be Choice of Superannuation paid into a complying fund, or if Fund the amount paid is less than the Superannuation Guarantee 5.9 VicSuper Pty Ltd – minimum obligation then any VicSuper FutureSaver Superannuation Guarantee Locally paid staff are, by Charge will be payable to the default, made members of Australian Taxation Office. An VicSuper FutureSaver, which employee will be issued with a has been developed tax voucher for any specifically to satisfy the Superannuation Guarantee requirement of the shortfall for deposit into his/her Superannuation Guarantee Superannuation funds e.g. (Administration) Act 1992. VicSuper FutureSaver. • VicSuper FutureSaver is a The total of these components part of the VicSuper Fund, is known as the a complying Superannuation Guarantee superannuation fund Charge. • VicSuper FutureSaver is an accumulation scheme 5.7 Satisfying where benefits are based Superannuation on the accumulation of Guarantee requirements both employer and To satisfy Superannuation employee contributions (including rollovers) plus submitted to VicSuper through interest, less expenses the school level payroll when • VicSuper FutureSaver the electronic file is offers members a range of processed. VicSuper will notify 9 investment options the new member in writing of • VicSuper FutureSaver can the new account number. accept full or part time employees, casual For existing members: employees or contract Any updated information employees provided to the school by the • VicSuper FutureSaver employee will be sent to members may make VicSuper via the monthly voluntary personal electronic file. contributions either direct or via payroll deduction Note: VicSuper electronic file whilst in your employment creation includes salary • VicSuper FutureSaver may sacrifice, personal accept additional employer superannuation deductions contributions above any (after tax) and superannuation Superannuation Guarantee guarantee. (e.g. salary sacrifice) agreed between the employer and employee

• VicSuper FutureSaver accepts eligible spouse contributions

• VicSuper FutureSaver also accepts rollovers from other superannuation funds.

Under Choice of Fund regulations you are allowed to distribute information regarding your default fund (VicSuper).

5.9.1 VicSuper EmployersOnline Registering new members and paying monthly/quarterly contributions can be processed online. Contact VicSuper for details refer to Section 9 – Contacts.

5.9.2 Procedures – VicSuper FutureSaver Method 1: Superannuation contributions – Electronic file interface. For new members: Employee details will be Method 2: Superannuation listed on the Contributions 5.9.5 Resignation or Retirement contributions – Manual Advice form and included Upon resignation or paper based submission. with the total monthly retirement, a ‘Termination of contributions. Personal Employment Advice’ form For new members: Contributions must be (V101) should be completed • complete an Advise submitted to VicSuper within paying particular attention to VicSuper of contributions 28 days after the month in include the amount of the and new VicSuper fund which it was deducted. A members form and return outstanding contributions up it, together with the first member can also send to and including the last day contribution for the personal contributions to their of employment. members to VicSuper VicSuper FutureSaver by A Contributions Advice • upon receipt of this completing a ‘Make Personal form (V102) and a cheque information VicSuper will Contributions directly to send further information for these outstanding VicSuper’ form (V301) regarding the fund contributions should be included with his/her features, contribution included when forwarding opportunities, investment ‘welcome pack’, or upon the Termination of choice and insurance request to VicSuper, refer to directly to the employee. Employment form to Section 9 – Contacts. VicSuper. For existing members: • on a monthly basis, 5.9.4 Leave Without Pay Members wishing to claim (LWOP) school councils should their benefits after cessation complete an Advise VicSuper must be are required to complete the VicSuper of contributions notified when a member and new VicSuper fund relevant application form is on LWOP. Insurance members form available (available from VicSuper) to cover continues until the from VicSuper and formally apply for their forward it along with a earliest of: benefits. Therefore it is cheque made payable to  seven years of the essential that the ‘VicSuper Pty Ltd’ for the member commencing total contributions for the LWOP provided the Termination form is month. member has notified forwarded promptly to 5.9.3 Personal Contributions VicSuper in writing or VicSuper so that requested Members of VicSuper  until there are no longer benefits can be released. funds within the account FutureSaver may elect to If the employee is seeking to cover premiums due have personal contributions advice in regards to their (after deduction of PAYG tax)  the member cancels their resignation or retirement deducted from their pay and cover forwarded to VicSuper. An options or wish to request a  the member turns age 65 employee who is a member Benefit Payment form, they of VicSuper FutureSaver or should contact the VicSuper should complete a ‘Make  the member leaves personal and/or salary VicSuper. Member Centres refer to sacrifice contributions through A form for LWOP is section 9 – Contacts. your employer’ form (V302) for this to occur. This form available from VicSuper. 5.9.6 Death & Disability Cover should be retained by the It is also necessary to VicSuper FutureSaver offers school in the employee’s notify VicSuper when an personnel file. members death & disability employee returns to cover, i.e the account work. Refer to Section 9 Personal contributions via balance plus any insured – Contacts. payroll deductions should be amount applicable. In the event of the death of an employer contributions. council employs staff - eligible member, the school On termination of whether they are full time, council is required to employment a Cessation part time or casual. complete a ‘Termination of Advice should be promptly Additionally in some cases Employment Advice’ form sent to the ESSS. where a school council (V101) and arrange for the employs a contractor who is deceased dependant’s 6. WorkSafe ‘deemed’ by the WorkSafe executor or personal legal Requirements legislation to be an representative to forward employee, a policy is notification of death to 6.1 Introduction required. VicSuper. In the event of a As employers, school disability, please contact the councils have certain Further information on VicSuper Member Centre to responsibilities in respect of school council WorkSafe discuss options available for WorkSafe legislation. This obligations for contractors disability benefits. section is designed as a can be obtained at Please note that the member guide for school councils in www.worksafe.vic.gov.au needs to have been areas such as registrations, or from the school council’s continuously unable to work premiums and other WorkSafe insurer. due to injury or illness for six obligations for employees, consecutive months. contractors, volunteers and 6.3 WorkSafe Obligations work placement students. VicSuper also offers income A school council is required protection insurance. Please Schools can refer to the to have a WorkSafe Policy to arrange for the member to Health, Safety and cover all school council contact the VicSuper WorkSafe website for further employees paid both locally Member Centre for further information located at and through the central information refer to Section 9 http://www.education.vic.g payroll where the total – Contacts. ov.au/school/principals/ma annual payroll (school nagement/Pages/healthwo council employees only) is in 5.10 Emergency Services rksafe.aspx excess of $7,500. Superannuation Scheme (ESSS) If your worker has a work- 6.2 School Councils as Legal related injury or illness and 5.10.1 New, Revised and State Entities Employees Retirement the school council does not Benefits Schemes School councils are have WorkSafe Injury Schools may have employees regarded as separate legal Insurance in place, the on their school level payroll entities for WorkSafe benefits payable to the who are currently members of purposes. This means that injured worker are New, Revised and State they are legally responsible guaranteed by WorkSafe. Employees Retirement as employers to ensure that However, penalties may Benefits Scheme (SERBS). It the requirements of the apply for failing to hold a is the school council’s Accident Compensation Act policy and the school may responsibility to ensure the 1985 are followed. be liable for the full cost of any claims incurred whilst relevant employee’s 6.2.1 WorkSafe Policy contribution is remitted to the uninsured. A WorkSafe Policy is ESSS. The Council will be necessary where a school Penalties may also apply in billed on a monthly basis for the event that the rateable 6.4 Authorised Insurers remuneration is WorkSafe Victoria has underestimated or where the licensed five insurance Agent has not been notified companies to be authorised of the correct figure within 28 WorkSafe Agents for the days of exceeding your last management of policies, the estimate. collection of premiums and If the school council is not the management of claims. required to have a policy and School councils are free to one of the workers makes a select a WorkSafe Agent claim for compensation, the that best suits their particular claim must be reported to requirements. WorkSafe or your Agent and a fee will apply. (GST not 6.5 How to apply for a WorkSafe Policy applicable) • obtain an application for However a school council a WorkSafe Policy from a must take out a policy WorkSafe Agent or immediately if: download from www.worksafe.vic.gov. • any school council au employee lodges a WorkSafe claim • if the annual payroll is more than $7,500, • it becomes apparent the complete an application annual payroll will exceed (including estimated $7,500. wages, salaries and superannuation) and 6.3.1 Annual Payroll more than $7,500 forward to your WorkSafe Agent A school council with total payment of salaries, wages • once registered, the WorkSafe claims agent and allowances in a financial will issue the school year of more than $7,500 council with a policy must obtain a WorkSafe number and ‘Conditions of the Policy’ policy from a WorkSafe Agent authorised by • if a school council’s WorkSafe Victoria. annual payroll is under $7,500 and the school Policy application forms can council is registering be obtained by telephoning because of an employee’s claim, then mail the WorkSafe Victoria employee’s claim, 1800 136 089, or can be employer’s claim report downloaded from and application for WorkSafe Policy www.worksafe.vic.gov.au or nominating the preferred any authorised WorkSafe WorkSafe Agent, along Agent listed in Section 10 of with a registration fee this booklet. direct to WorkSafe Victoria. 6.6 Premiums payments on the claim until they are very clear on the proof is received that the status of both employees 6.6.1 Calculation and contractors. Schools employer has fulfilled this WorkSafe premium should also ensure that liability. An employer can any contractors are clear calculations are based on an choose to pay a higher on the school council’s employer’s payroll, industry view of their employment premium in order to opt out classification and claims status. of the initial liability. This history. option is called ‘buy out’ and

6.6.2 Options for the payment of the cost is 10% of the WorkSafe premium employer’s total premium Instalments are payable to (premium plus government the authorised WorkSafe surcharge). Agent monthly, quarterly, Employers can only elect to annually or in advance. take the ‘buy out’ option at the beginning of each 6.6.3 Queries financial year before the Queries regarding an initial premium is calculated. individual school’s premium should be directed to the 6.8 WorkSafe Obligations – school council’s WorkSafe Contractors Agent. Relationships between employers and contractors Late payments or failure to can be complex. School pay instalments will not only councils should seek advice incur interest but will also from their WorkSafe Agent result in the total amount regarding their WorkSafe obligations to contractors. outstanding for the whole of the policy becoming due and School councils are advised to sight a contractors’ payable. WorkSafe policy, note the employer number and the 6.7 Buy-Out Option name and address of the Authorised WorkSafe Agents Under the employer before allowing the work to threshold liability the commence. It is possible that employer is required to pay the school council could be deemed to be the employer the first ten days of the time of the contractor in the event away from work and the of a claim or legal action. initial medical and like Further information is services. contained in the ‘Contractors and WorkCover’ booklet The threshold is indexed in available from any WorkSafe July each year, refer to your Agent, WorkSafe Victoria on telephone number 1800 136 WorkSafe Agent for the 089, or can be downloaded current amount. from the WorkSafe website www.worksafe.vic.gov.au

The Authorised WorkSafe It is a school council’s Claims Agent will not make responsibility to ensure lieu of long service leave 6.9 Other WorkSafe 7. Ceasing entitlement is made after four Obligations Employment years' service. The Accident Compensation A staff member may be Act 1985 imposes further entitled to payment for Where an employee with at obligations on employers. unused annual leave and least four years' service dies, These obligations include: long service leave upon payment in lieu of unused • the provision of suitable cessation of employment. long service leave will be duties for injured workers Where the staff member has made to the employee’s • timely payment of weekly any outstanding personal legal representative. compensation overpayments in accordance • forwarding claims to the with the provisions of the WorkSafe Agent within Financial Management Act ten days 1994 any monies owing will • employers are currently be deducted from any final subject to fines for the payments. late lodgement of claims

• the provision of WorkSafe 7.1 Lump Sum Payments entitlement information for employees. 7.1.1 Unused Annual Leave and Long Service Leave Annual Leave and Salary Loading School councils should Certain payments in respect contact their WorkSafe Agent Allowance for further information on of unused annual leave and their obligations. More long service leave are entitled An employee who ceases information can also be to concessional tax treatment employment (including the located in the WorkSafe when employment ceases. Management manual, expiration of a fixed period of available from That is why the amounts are employment) will be paid in http://www.education.vic.g separately recorded on the lieu of his or her unused ov.au/school/principals/ma payment summary and annual leave and salary nagement/Pages/worksafe mgtkit.aspx separately recorded on the loading allowance. tax return. Further information relating to taxing lump sum The amount paid is payments is available on the equivalent to the salary and ATO website. allowances the person would have received if annual leave Long Service Leave had been granted. An employee who ceases 7.1.2 Taxing Lump Sum employment (including the Payments expiration of a fixed period of If employment is terminated, employment) with at least certain payments for unused seven years service is annual leave and long service entitled to be paid in lieu of leave are entitled to his or her accrued long concessional tax treatment. service leave entitlement. If This is why the amounts must the cessation is as a result of be separately recorded on age or ill health, payment in the payment summary. www.centrelink.gov.au Schools should ensure that lump sum amounts are listed Further assistance with in the correct column of completing the form is payment summaries. For available from the Centrelink advice about what constitutes Employer Contact Unit on 13 an A, B, D, E or ETP 11 58. payment and tax, contact the ATO on 13 28 66.

Lump sum payments of accrued annual and long service leave paid on termination of employment are not employment termination payments (ETPs). To help understand ETPs and Statement of Termination Payment forms refer the ATO website and search for Employment Termination payments.

7.1.3 Retrenchment

Where an employee is retrenched a separation package attached to the redundancy will attract specific tax benefits. See the ATO website for information relating to the taxation of such payments.

7.2 Employment Separation Certificate Form Employment Separation Certificate forms can be obtained from Centrelink or downloaded from the website below and should be completed and given on request to an employee who is ceasing employment. commence and discontinue 8. Administration deductions. 8.3 Retention of Records Income tax legislation 8.1 Australian Business requires that wage and tax Number (ABN) records (i.e. Payment Registration Summaries) should be kept All existing schools were for a minimum period of five registered for ABN purposes years. when the new tax system was implemented in July All local personnel records 2000. should be kept in accordance with the standards set by the Schools needing a new ABN Public Record Office Victoria (PROV) and guidelines or requiring to amend their issued by the Department. registration e.g. because of a name change or school Refer to Archives and closure, should contact the Records Management on the DEECD Tax Compliance Unit School Policy & Advisory to process the registration Guide website at Records and changes. The Tax management Compliance Unit email address is 8.4 Casual Relief Teachers Record of Hours Worked [email protected] Principals are asked to 8.2 Documenting Payroll provide a letter to casual Related Information relief teachers on school School councils need to letterhead detailing the extent ensure that all payroll related of the casual relief teaching information, for example time work undertaken in each sheets, wage records, tax financial year. It is suggested records, personal history that this letter be provided details, leave forms and with the casual relief WorkSafe records are teacher’s payment summary. documented and retained. For more information, refer to the casual relief teacher page Timesheets for all employees on HRWeb at: Casual Relief paid through the school level Teachers payroll must be authorised by the manager, then reviewed 8.5 Work Experience Students and signed by the principal prior to payday. Payment and Taxation The minimum rate of Employee related deductions payment for work experience e.g. after tax superannuation students is $5 per day. If the contributions, are required to student is paid the minimum be in writing both to rate of $5 per day during the period of the work experience arrangements the Australian However, if the student Taxation Office (ATO) will not receives more than the require the student to have a minimum rate, this could tax file number or complete affect the exemptions above. an income tax return, nor will the employer be required to Where the student is under issue a payment summary to the age of 18, if the payment the student at the end of the made to the student is less financial year. than $350 per week, the Payment can be made employer will not be obligated through Creditors (Accounts to: Payable) using the ABN • make any Withholding exemption RE • collect tax file number (Reimbursements) with a declarations Statement by Supplier form • issue payment and a schedule of the hours summaries, and worked. • report payment details to the ATO.

Students aged 18 years and over will be required to provide a Tax File Number (TFN) declaration to the employer. The employer will be required to withhold amounts in accordance with the tax tables (where applicable), issue payment summaries and report these payments to the Tax Office, as they would do for their employees. The Work Experience Manual is available from the DEECD website. (03) 9667 9665 9. Contacts Authorised WorkSafe Australian Taxation Office VicSuper Employer Services Agents website: www.ato.gov.au Fax (03) 9667 9696 Allianz Australia Workers’ Australian Taxation Office VicSuper Member Centre Compensation Telephone Numbers 1300 366 216 (Victoria) Limited (03) 9234 13 28 66 3800 VicSuper Adviser Booking Line (03) 9667 Xchanging (03) 9947 3000 9600 Assistance can also be CGU Workers Compensation obtained from other areas of (Victoria) Limited (03) 8630 the Commonwealth 1000 Government

QBE Workers Compensation Australian Securities (Victoria) Limited (03) 9246 Commission (ASC) 1300 300 2444 630

Gallagher Centrelink Bassett Compensation Employers Contact Unit 13 Victoria Pty Ltd (03) 9297 11 58 9000 Family Tax Assistance 13 24 13 CASES21 School Level Parenting Allowance 13 Payroll 24 13 Enquiries Service Desk 1800 641 Privacy Hotline 1800 943 023 985

Schools Financial VicSuper Management unit

Employer Services The Schools Financial VicSuper Management unit of Financial GPO Box 89 MELBOURNE Services Division (FSD) VIC 3001 provides policy, advice and website: support to schools regions, www.vicsuper.com.au divisions and agencies on the financial operations and School Council Telephone financial management in Support schools. VicSuper Employer Services www.ato.gov.au The DEECD Tax Compliance 10. Website Unit References Employment Termination Payments – The DEECD Tax Compliance Schools Financial www.ato.gov.au Unit of Financial Services Management An Employer’s Guide – Division (FSD) provides policy http://www.education.vic.gov.a The Superannuation and advice to schools, Guarantee (ATO) u/school/principals/finance/pag regions, divisions, agencies on www.ato.gov.au es/default.aspx the operation of the various Family Assistance Office taxes that affect the HRWeb School Council website: Department and its subsidiary www.familyassist.gov.au Employment bodies in its operations. http://www.education.vic.gov.a Fair Work Online u/hrweb/employcond/Pages/S www.fairwork.gov.au. chool_Council_Employment.a Business Manager Networks spx Business Manager Networks have been established for all Casual Relief Teachers schools in each region across http://www.education.vic.gov.a the state. u/hrweb/careers/Pages/crt.asp x

DEECD Tax Resource Centre https://edugate.eduweb.vic.go v.au/Services/Finance/Pages/ Tax.aspx

Tax Information and Tax tables www.ato.gov.au

WorkSafe Information http://www.education.vic.gov.a u/school/principals/manageme nt/Pages/healthworksafe.aspx Business Activity Statement Instructions (ATO) www.ato.gov.au

Online BAS information www.ato.gov.au

Lump sum payments for unused annual leave and long service leave Department of Education and Early Childhood Development. http://www.education.vi c.gov.au/school/principa ls/finance/pages/default .aspx