Small Business Superannuation, Payroll, WorkCover and FBT Registration Requirements
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Registration formalities when starting a business
If you are starting a business in Australia, you may be required to complete various registration formalities that are made mandatory by different agencies such as the Australian Taxation Office and the State Revenue Offices. However, not all businesses need to register with these agencies. Whether or not your business is obligated to fulfil these registrations will depend on the type of business you are running, your annual turnover from the business, the number of employees you have and other such factors. This article lists the most common types of registrations that need to be completed by new business start-ups in Australia.
Registration requirements for Australian businesses
As a new business in Australia, here are some of the main registrations that you may need to complete:
- Registering for Superannuation: A business owner may be required to make superannuation contributions for all those employees who are deemed eligible for the same. Hence, if you have any employees who are between 18 and 69 years of age and if you are paying them a certain monthly wage (generally $450 or more), then you could have to make super contributions for such employees. These contributions are typically made about 4 times in a year. You can visit the website of the Australian Taxation Office (ATO) to determine whether or not your business needs to make superannuation contributions and to register for the same as the case may be.
- Registering for FBT: FBT, also known as Fringe Benefit Tax may be applicable to your business. FBT is a tax that business owners have to pay on certain fringe benefits that they may provide to their employees or to their families and other associates. This includes the use of mobile phones, conveyance expenses as well as several other fringe benefits. You can check on the ATO website whether you need to pay FBT or not and can download an application form to register for FBT from the same website. Once you have completed the registration process, you will need to file an FBT return and pay the appropriate amount of tax before the due date every year. An accountant can help you to determine your exact liability in terms of fringe benefit tax arising from your business.
- Registering for Payroll Tax: Payroll tax is a kind of tax that Australian businesses have to pay on the wages that are paid to their employees. The state revenue office collects the payroll tax from eligible businesses. There is an exemption threshold mentioned by the state revenue offices and if your company wages do not exceed that threshold limit then you do not have to pay payroll tax. However, if the total wages that your business pays in all of Australia exceed the threshold limit, then your business is liable to pay payroll taxes. The rate of tax as well as the exemption threshold limits differ from state to state, hence you need to know the exact requirements in your particular state with regards to payroll tax. If your business does need to pay this type of tax, then you have to register for payroll tax with the respective state revenue office in your state.
- Registering for WorkCover: WorkCover is a worker’s rehabilitation and compensation scheme that is run by various state governments in Australia. As per this scheme, many Australian businesses are required to register for WorkCover and pay a certain amount as workcover levy each year. This amount that is paid under the workcover scheme is then used to compensate any worker in the business that may get injured while at work. Whether or not your business needs to register for workcover will be determined by various factors such as the industry that your business falls under, the nature of work performed by employees and the safety performance of your company. Under this scheme, an injured worker is compensated and the burden of such compensation does not fall on the individual business. Hence, the businesses as well as the employees, both are protected in the event of any mishap during work that may lead to an employee getting injured. However, certain businesses are exempt from paying workcover levy. If you do not pay a certain amount of wages to your employees as specified by the workcover scheme, then your business could be exempt from registering for workcover.
In addition to these main types of registrations, a new business in Australia may also need to complete insurance formalities, apply for an ABN and register for PAYG taxes. Without completing all these legal formalities, you may not be able to get your business off to a great start. There are certain time limits that are provided to new business owners to complete all these registrations and you typically have to pay penalties if you do not complete the registrations within the specified time limits. The website of the ATO and State revenue Offices provides detailed information about this topic.
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