You will be required to prepare a report and a presentation for Bill layer on his rights and obligations under the Income tax. Bill Layer, one of the subcontractors to Colossal Constructions Pty Limited, has decided to employ two labourers to cope with the increased workload. One labourer will be on a full-time basis and the other on a casual basis. Bill has never employed people before.
Bill Layer follows your advice, but he comes to you for help in working out the wages for his first week as an employer. The ATO has sent Bill a Business Activity Statement and a weekly tax instalment schedule. The two employees have given Bill TFN declarations showing that they are residents, quoting their TFNs and stating that they both wish to claim the tax free threshold. Neither employee wishes to claim any rebates. Assume Bill pays leave loading to his employees. A check of Bill’s wages book shows that the full-time employee earned $100 per day for five days, and the casual employee earned $80 per day for two days.
Prepare presentation of no less than 15 slides where you will present the following five questions.
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- Explain to Bill in simple terms how the PAYG withholding system works and advise him of any specific requirements to which he should attend.
- Advise Bill of the appropriate amount of tax to deduct for each employee for this first week.
- Advise Bill of the net amount to pay each employee.
- Assuming Bill pays the full-time employee $500 per week for the next three months and does not re-employ the casual employee, what would be the total tax withheld for the quarter?
- If Bill is registered as a Small withholder and has to lodge quarterly Business Activity Statements, what further advice would you give him?