Info base

Info Base

Our Info Base is a collection of fact sheets, templates, downloadable forms, lodgement checklists, taxation details and other relevant information. 

Select a topic to view details »

  • INFO BASE

    • Resources

      • Individuals

          Residents: Personal tax rates and thresholds

          These rates apply to individuals who are Australian residents for tax purposes: 

          read more »

          Non-Residents: Personal tax rates

          Non-residents are not subject to the $18,200 tax free threshold and are not required to pay the Medicare levy.   

          read more »

          Rental Properties

          Purchasing a rental propertyWhen purchasing a financed rental property you may consider:o The interest on the debt is deductible in contrast to the interest on the debt for your main…

          read more »

          Motor Vehicle Deductions

          Since 1 July 2015 there are only two methods available for claiming a deduction for motor vehicle expenses:Logbook, orCents per kilometre All motor vehicle claims need to be supported by…

          read more »
      • Tax Rates

          Residents: Personal tax rates and thresholds

          These rates apply to individuals who are Australian residents for tax purposes: 

          read more »

          Non-Residents: Personal tax rates

          Non-residents are not subject to the $18,200 tax free threshold and are not required to pay the Medicare levy.   

          read more »

          Weekly, Fortnightly & Monthly Tax Tables

          To calculate the Pay As You Go (PAYG) withholding tax amount for your employees download the weekly, fortnightly or monthly tax tables below, depending on your agreed pay frequency. These schedules incorporate the…

          read more »
      • Lodgement Dates

          Tax Return Lodgements 2017

          A list of lodgement dates applicable to tax returns for the 2016 - 2017 financial year is below:Individual Tax Returns –• Individuals who lodge their own tax returns, the due date…

          read more »

          BAS Lodgements 2017-2018

          The lodgement program due dates for the 2017 - 2018 financial year are listed below for all quarterly and monthly activity statements, including PAYG withholding payments. Please note the different…

          read more »
      • Checklists and Downloads

          Personal Tax Return Checklist

          Income:• Group certificate(s)• Statements of any allowances, Centrelink benefits or pensions• Details of interest received on bank accounts• Dividend statements• Rental property statements from managing agent or details of any…

          read more »

          Tax Return Checklist for Rental Property Income

          Income & Expenses:• Rental statements from property agents – these will include the rental income, property agent fees and commissions, and advertising expenses• Body corporate / strata fees•…

          read more »

          Requirements for BAS

          Below is a list of the detail required to be able to process BAS documentation for lodgement:Bank statements for the full BAS period – Make sure you have all the…

          read more »

          Spreadsheets - Business Income & Expenses

          It's not always necessary to purchase, install, create and update complicated accounting package programs when starting up a business. Sometimes a simple Excel spreadsheet can be more suitable, particularly with sole traders and…

          read more »

          Spreadsheet - Rental Property

          This spreadsheet is a useful tool for monitoring your rental property's income and expenses for your year end tax return. Keep track of your quarterly earnings and expenditure, as well as capital purchases…

          read more »

          Spreadsheet - Motor Vehicle Expenses

          This spreadsheet is a useful tool for monitoring and recording your motor vehicle expenses for your year-end tax return. Keep track of your quarterly expenditure, including lease payments and interest on loans…

          read more »

          Template - Motor Vehicle Logbook

          A logbook can help you get the most from your business or work-related motor vehicle use. Download this template so you can keep track of each business or work-related trip…

          read more »
      • Superannuation

          Consolidating your super

          There are numerous benefits to keeping your super in one place.  Apart from only paying one set of fees, you will also be able to keep track of your retirement…

          read more »

          Binding Beneficiaries Nominations

          Under superannuation law, the Trustee of your super fund has the discretionary power to decide which of your dependents receives your super if you die before you retire. The law…

          read more »
      • Estate Planning

          Template - Last Will & Testament

          A Will is a legal document that clearly sets out your wishes for the distribution of your assets after your death. Having a clear, legally valid and up-to-date Will is…

          read more »
      • Starting a New Business

          Starting Up Your Business

          1.  Business PlanBefore you register for an ABN and start trading it is vital to sit down and flesh out the finer points of your business idea: Consider the different…

          read more »

          Company & Trust Set Up

          If you decide on a company or trust structure for your new business AFYF can assist you in meeting the various legal, ATO and ASIC documentation necessary for registration and…

          read more »

          Registering a Business Name

          When you first get started in a business you should register your business name with ASIC. Registration of a business name lasts for either one or three years, depending on the…

          read more »

          Company & Partnership Agreements & Deeds

          When first setting up your partnership, company or trust there may be a requirement to draw up and sign an agreement or deed. These agreements can regulate the arrangements between partners,…

          read more »

          Invoicing - What to Include

          Invoices can be hand-written, carbon copies or computer generated from programs like Xero or MYOB, but they all need to include certain details.  For businesses registered for GST invoices need…

          read more »
      • BAS & GST

          BAS Lodgement Dates 2017-2018

          The lodgement program due dates for the 2017 - 2018 financial year are listed below for all quarterly and monthly activity statements, including PAYG withholding payments. Please note the different…

          read more »

          Requirements for BAS

          Below is a list of the detail required to be able to process BAS documentation for lodgement:Bank statements for the full BAS period – Make sure you have all the…

          read more »
      • Business Planning

          Business Planning

          A business plan is an essential tool in starting up your business. It allows you to set a clear direction for your business, to communicate planning objectives and strategies to…

          read more »
      • Employing People

          Weekly, Fortnightly & Monthly Tax Tables

          To calculate the Pay As You Go (PAYG) withholding tax amount for your employees download the weekly, fortnightly or monthly tax tables below, depending on your agreed pay frequency. These schedules incorporate the…

          read more »

          Job Descriptions with Various Templates

          The job description should be the very first step in the recruitment process. It provides a support for writing job advertisements, specifying necessary qualifications, interviewing candidates, planning job training and…

          read more »

          Letters of Offer & Example

          A letter of offer is an important aspect when hiring a new employee as it outlines the terms and conditions of the job being offered.Try to include as much detail…

          read more »

          Letters of Appointment & Example

          A letter of appointment is another aspect of the recruitment process that the employer should complete to confirm the details of employment. It generally only needs to be a short…

          read more »

          Issuing Payment Summaries to Employees

          Payment summaries must be issued to every employee paid during a financial year ending 30 June. These summaries should be given to employees by the 14 July each year.The information…

          read more »

      Personal Services Income - Avoiding Common Mistakes

      Recently the ATO published a fact sheet.  There are eight mistakes that companies, partnerships or trusts (personal services entities) commonly make in relation to personal services income.

      These have been divided into four common mistake areas:
      • Personal services business tests
      The tests that determine whether personal services income is affected by the personal services income measures are often incorrectly applied.
      • Retaining profits
      Profits from personal services income, which should be attributed (or treated as belonging) to an individual, are often incorrectly retained by companies.
      • Pay as you go (PAYG) withholding
      Frequently the additional PAYG withholding obligations for personal services income are not met
      • Tax returns
      When a tax return is lodged, often the required personal services income schedule is not completed and deductions are incorrectly claimed.

      Personal Services Business Tests

      There are four tests against which you can self assess whether the personal services income measures apply. These are the:
      • Result test
      • Unrelated clients test
      • Employment test, and
      • Business premises test

      Four mistakes are commonly made in relation to the tests.

      Results Test

      Common mistake: self assessing that the first condition of the results test has been passed when paid on an hourly basis or daily rate.

      To pass the first condition of the results test, the income you receive under a contract or arrangement must be paid to you as a result of achieving a specified result or outcome. This means that you must be:
      • Engaged to complete a specified job, and
      • Paid on completion of that job.

      If you are paid on an hourly basis or daily rate for the services you provide, it is unlikely you’ll pass the first condition of the results test.

      Example – Meeting the first condition of the results test

      A government department enters a contract with Consultant Co for the provision of services by a named individual. The individual is required to develop a product for the department’s IT system, to the functional specifications nominated by the department.

      The contract specifies a daily rate of payment to Consultant Co for developing the product, with payments to be made on a weekly basis.

      This contract does not satisfy the first condition of the results test as payments are for work done during the week and not upon completion of a specified result.

      The 80% Rule

      Common mistake: Not obtaining a determination (or applying the measures) when you don’t meet the results test and 80% or more of the income is from one client.

      When using the four tests to work out if the personal services income measures apply to your income, the results test is used first.

      If 80% or more of your personal services income in the income is from one client (80% rule), you cannot self assess whether you meet the other personal services business tests. In this situation you need to obtain a personal services business determination from the Tax Office, otherwise the personal services income measures will apply.

      Unrelated clients test

      Common mistake: Self assessing that the unrelated clients test has been met when the services provided are not a direct result of making offers to the public.

      A condition of the unrelated clients test is that the services must be provided as a direct result of making offers to the public.

      To make an offer to the public, there needs to be a definite connection between the offer of services and the engagement for the work. Making offers to the public includes:
      • Advertising in a newspaper, magazine or business directory
      • Maintaining an internet web site, or
      • Word-of-mouth referrals

      Offering services through a labour hire firm or registering with an agency is not considered offering services to the public under the unreeled clients test.

      Example – Offering services to the public under the unrelated clients test

      A computer programmer operates through a company. One client provides 65 per cent of the company’s income (the programmer’s personal services income) and the other client provides the balance. Both contracts were obtained though a labour hire firm.

      As the contracts were obtained via a labour hire firm, these clients cannot be counted for the purposes of the unrelated clients test.

      If the services had been provided as a direct result of the company advertising to the public, and not through a labour hire firm, this part of the test would have been passed.

      Applying the tests

      Common mistakes: Applying the personal services business tests to the whole entity and not to the individual(s). If you channel the income of more than one consultant or contractor through your entity, you cannot apply the personal services business tests to the whole entity. You need to apply the tests on an individual by-individual basis. This requires that you must keep records of the separate streams of income and expenses for each consultant or contractor.

      Example – Applying the personal services business tests

      Two management business consultants operate through a company. They provide services to the public under separate contracts. Neither consultant works on the contracts of the other.

      As there are separate streams of personal services income (i.e. each consultant is providing exclusive services under separate contracts), the personal services business tests must be applied separately for each individual consultant.

      That is, if the employment test is passed in relation to one individual consultant (only), this cannot be applied to the personal services income of the other consultant. The other consultant must also pass a personal services business test, or hold a personal services business determination from the Commissioner, in order for the personal services income measures not to apply to their personal services income.

      Retaining Profits

      Common mistake: Retaining profits from personal services income. If your company makes a profit from personal services income, you need to promptly:
      • Pay this profit as salary and wage, or
      • Attribute it to the individual who performed the services

      Example

      Retaining profits

      A computer consultant earns a personal services income to the consultant as salary and wages. As a result, the net personal services income needs to be attributed to the consultant. For tax purposes only, the consultant’s personal services income less any allowable deductions is included in the assessable income of the consultant (attribution) and tax is paid by the consultant on this net income. For instance, the consultant cannot contribute 70% to themselves and retain 30% in the company (for tax purposes). The total amount of personal services income (i.e. 100%) less allowable deductions at the end of the year must be attributed to the individual.

      If the company had promptly paid some of the personal services income as salary and wages throughout the year, it would only need to attribute the remaining personal services income less any allowable deductions at the end of the year.

      Pay As You Go (PAYG) Withholding

      Common mistake: Not complying with the additional PAYG withholding obligations.

      If you are affected by the personal services income measures, you will have additional PAYG withholding obligations, unless you are already paying out the personal services income to the relevant individual as salary and wages.

      Companies and trusts must:
      • Apply normal PAYG withholding rules to any of the income that is promptly paid out to the individual as salary or wages within 14 days after the end of the relevant period (i.e. monthly or quarterly); and
      • Report and pay additional PAYG withholding on the attributed income (i.e. personal services income that has not been promptly paid as salary or wages).

      Partnerships must:
      • Attribute the personal services income to the individual who generated it (partners can’t receive salary or wages); and
      • Report and pay additional PAYG withholding on the attributed amount.

      Tax Returns

      Two mistakes are commonly made in relation to tax returns.

      Personal services income schedule

      Common mistake: Failing to complete and attach the personal services income schedule to the tax return.

      When you lodge your tax return you must:
      • Answer the relevant questions about personal services income,
      • Complete and attach the personal services income schedule.

      The personal services income schedule must be lodged even if you satisfy one of the personal services business tests.

      Claiming deductions

      Common mistake: Claiming deductions for personal services income where there is no entitlement.

      When you claim deductions for your personal services income, you need to be aware of your tax obligations and entitlements to ensure you are claiming the correct amount.

      Generally, you can claim a deduction for an amount you have paid or incurred only if it relates to gaining or producing your assessable income.

      However, if you are affected by the personal services income measures, there are certain deductions you cannot claim. These include:
      • Rent, mortgage interest, rates or land tax for your home (or your associate’s home) that is a place of business, or
      • Payments to your spouse (or other associate) for support work such as secretarial duties.

      Source: The Taxation Examiner’s Bi-Monthly Newsletter, March-April 2008


      Previous Next