The TPAR informs the ATO about payments that are made to contractors for providing services. Industries required to report TPAR for 2019 are listed in the below table.
Contractors can include subcontractors, consultants and independent contractors. They can be operating as sole traders (individuals), companies, partnerships or trusts.
The ATO uses this information to identify contractors who haven't met their tax obligations.
The Taxable Payments Annual Reporting scheme for contractors applies to the industries as per below:
What Has to be Reported?
A TPAR report requires the business to outline:
ICB feels that most of this information is already captured in the day-to-day bookkeeping processes in the accounting file. It may just mean that clients/bookkeepers need to be more diligent in capturing ABNs for suppliers and flagging those suppliers or employees (if a voluntary agreement is in place) that are reportable and assigning the payments into a separate account on the chart of accounts.
Who Can Report?
Tax Agents and BAS Agents can advise, prepare, and lodge the Taxable Payments Annual Report. Business owners can also prepare and lodge the report. The bookkeeper can assist the owner to prepare the report but may not lodge the report directly.
Reconcile TPAR to Subcontractor's Expense Account
Recommend comparing the total value of subcontractor’s expense to the TPAR report.
You may find a small difference which may be a result of
Prepare and Lodge TPAR
The form must be lodged either electronically or via the ATO paper form.To lodge the Taxable Payments Annual Report using electronic transfer, you need to create an electronic annual report data file using accounting software.
Note: You cannot lodge the following media forms: spreadsheets, CD ROM, DVD, USB, floppy or zip disk.
Electronic Lodgement Options
TPAR Lodgement Due Date
TPAR lodgement date is 28 August each year.
Paper FormIf you want to lodge a paper form, you must complete and send the Taxable Payments Annual Report to the ATO.
Note: You must use this form; you cannot create your own form.
TPAR – Nil Report
For the 2019 lodgement year you are required to lodge Nil report if in:
If you need to amend a Taxable Payments Annual Report, please contact us to assist you in the process.
On 30 May 2019 the Fair Work Commission announced that as of the first full pay period in July, the minimum wages in modern awards would increase by 3% (and so would the Federal minimum wage for award-free employees).
But does this mean that employers have to increase the wages of all employees by 3%? The simple answer is no. The minimum rates set out in modern awards are exactly that: minimum rates of pay. If you are already paying above the award then there is generally no obligation to increase wages just because the minimum wage has increased (unless the new minimum wage will now be greater than the rate you are paying).
Employers who pay “above the award” rates of pay in order to meet all the entitlements that arise under an award should ensure that the rate of pay is still sufficient to cover all entitlements that might arise under the award (e.g. overtime, allowances, etc.) now that the minimum rates have increased. Employers should also make sure that employment contracts clearly state that the employee's wage or salary covers all entitlements that arise under the award – to avoid an employee being entitled to an above the award rate of pay plus payment for overtime, allowances, etc.
Employers covered by an enterprise agreement should remember that the Fair Work Act 2009 states that if the base rate of pay in an enterprise agreement is overtaken by the base rate of pay in a modern award that would otherwise apply to the employee, then the employer must pay the award base rate of pay, rather than the rate stated in the enterprise agreement. NB this obligation to match the award rate only arises in relation to base rates of pay. There is no obligation for the overtime or penalty rates in an enterprise agreement to “keep up” with the award rate of pay (unless the enterprise agreement has specifically provided for this).
National Minimum Wage IncreaseThe Fair Work Commission has handed down its decision to increase the national minimum adult wage by 3%. This increase will be applicable from the first full pay period commencing on or after 1 July 2019.
The new adult National Minimum Wage will be $740.80 per week or $19.49 per hour. This constitutes an increase of $21.60 per week to the weekly rate.
No changes take effect until the first full pay period on or after 1 July 2019. However, all employers should refer to the appropriate awards covering their employees.
To find out what is required to update your software, please call us.