‘It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging our responsibilities.’ – Josiah Charles Stamp

 All industries have their own compliance regulations to ensure all the necessary standards are met.

Meeting these compliance requirements is a must, otherwise it can become very costly to your business.  Worse still, you could lose your licences and registrations and, in certain cases, your insurances may not help.

There is no difference when it comes to financial management of your business. You need to ensure that all of your statutory compliance is met on time and with complete accuracy. If you don’t, you’ll be hit with penalties, interest and extra costs to fix the problem.

Tax

The first obligation is to lodge annual tax returns to the ATO, be they as an individual, partnership, company, trust or SMSF.

The second is your obligation to lodge monthly or quarterly activity statements to account for (GST), (PAYG) withholding and your PAYG instalments. The frequency of your activity statements will depend on the turnover of your business (for GST) and the level of your payroll (PAYG). Irrespective of the frequency, the obligation remains the same: lodgement must take place. Meeting these ATO obligations keeps you ahead of the game. There are some non-negotiables in business and the ATO is one of them. The sooner you accept its place in business and the obligation for the lodgement and payment of your compliance requirements, the better off you will be.

Superannuation

You are required to provide a minimum level of superannuation for your employees, now being 10% per cent of their gross pay. If you don’t pay the required minimum, you will be liable to pay a non-deductiblesuperannuation guarantee charge, which is made up of the super shortfall (the super you should have paid) plus nominal interest of 10% plus an administration charge of $20 per quarter per employee. When you employ people on your payroll, it is relatively straightforward to understand your requirement to pay superannuation. What sometimes gets lost or forgotten is the requirement to pay the same 10 per cent of gross payments to your subcontractors. Not all your subcontractors would attract this requirement, but those who just supply labour as individuals/sole traders and those who work predominately for you would.

Workers’ Compensation

When employing a labour force, you must ensure that they are covered for any injury caused relating to their employment with your business.

Workers’ compensation applies in a similar manner to superannuation. If the labour, be it under an employee relationship or as a permanent or semi-permanent subcontractor, is considered to be an employee relationship in the eyes of the industrial relations and tax law regime, then workers’ compensation is required to be paid. Just like with superannuation, determining how you engage the services of subcontractors will have an impact on your workers’ compensation payments.

Summary

In summary, there are many statutory compliance obligations placed upon you in your business. Being aware of these is the first step. Being set up to account for these is the second. Knowledge is power but management is success.

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