With only a week to go until Christmas many small business owners are desperately trying to keep everything together and make it through this busy time of year. It’s not just running a business, it’s also end of school functions, sport functions, work functions, organising pets and holidays, organising food and getting the present shopping done.
If you have employees then you can also throw payroll issues into the mix as well. The Christmas period brings with it a few extra challenges to face as an employer, so I’ve prepared these 5 tips to help you through so you’ve still got some wind left in your sails to enjoy the silly season. These tips apply to Australian readers, but will give other readers some ideas as to what they need to look out for as well.
1. Christmas bonuses and super
Bonuses are considered Ordinary Time Earnings (OTE) and must therefore be included in your calculation of the super guarantee for your employees. More info on bonuses here.
2. Asking employees to take Annual leave
This is really interesting and can be a bit of a touchy topic for employers and employees. When I was an employed bookkeeper I was asked to use up some of my annual leave – not just over the Christmas break but when I had a bit accumulated during the year. An employer can only direct an employee to use up their annual leave in some situations. There is often an amount of notice you must give your employees as well. You need to check the relevant Award or Registered Agreement to see under what circumstances you’re allowed to direct your staff to take annual leave.
2. Rest breaks
Many businesses are busy this time of year, however there is a maximum amount of hours you can make your employees work without a break. Check the Award or registered agreement that your employees come under. For example, the Clerks Private Sector Award 2010 stipulates (at the time of writing) that employees who work for 5 hours or more must get at least 1 meal break. More info on Awards and break entitlements here.
4. Casual vs part-time vs fixed term
There are differences between casual employees, part-time employees and fixed term employees – and yes, the onus is on the employer to ensure they have categorised the employee correctly and have given them the appropriate entitlements. You may hire someone on a casual basis over the Christmas break but the actual working conditions may change over time and their entitlements should be reviewed accordingly.
5. Christmas parties
Ahhh … Christmas parties. What to claim and what not to claim? There are rules around when you can claim a tax deduction, when you can claim GST credits and what you need to pay fringe benefits tax on. First you need to determine if the food and drink you’re providing is considered “entertainment” in the eyes of the ATO. You need to look at why the food and drink is being provided, what type, when it’s being provided and where (on or off business premises). You can find the ATO’s rules regarding providing entertainment and the associated taxes here. There are some helpful scenarios that walk you through the process of deciding what to claim.
Wishing everyone a great Christmas.
More posts about payroll:
- Small business owners – Wages or Drawings?
- New Employee Checklist
- 3 simple steps to getting your bookkeeping sorted