Tony Nunes
by Tony Nunes
Foreign businesses and organisations seeking to do business and employ people in Australia must comply with a range of obligations in their capacity as employers. Key obligations are outlined below:
Superannuation
Under Australian law, foreign resident employers must contribute to the retirement savings of their Australian resident employees and foreign resident employees who perform work in Australia. Contributions must be made to a complying superannuation fund. Further, the superannuation guarantee law requires that all eligible employees receive a minimum superannuation payment per quarter, payable by their employer into an individual’s nominated superannuation account in a complying superannuation fund. Foreign resident employers are not required to make contributions to employees who earn less than AUD 450 per month (before tax) or who are under 18 years of age.
Pay as you go (“PAYG”) withholding
Generally, PAYG withholding tax applies to the employment income of Australian residents and to Australian-sourced employment income earned by foreign resident employees. Foreign resident employers are not required to withhold PAYG amounts where their employees’ employment income is not taxable in Australia. It is advisable to review the relevant Australian double tax agreement to confirm the residency of the employees and the taxing rights of the relevant countries.
Fringe benefit tax (“FBT”)
Foreign resident employers that are required to withhold PAYG from payments made to their employees may also have FBT obligations in Australia if they provide benefits to their workers or their associates in place of, or in addition to, salary or wages. FBT is unusual in that it is a tax levied on employers in relation to benefits provided to employees.
If you are considering doing business or employing staff in Australia, be sure to check what obligations you may have in Australia.
GGI member firmKelly + Partners Chartered AccountantsSydney, AustraliaT: +61 2 9933 8866Advisory, Auditing and Accounting, Corporate Finance, Tax, Fiduciary and Estate PlanningKelly + Partners Chartered Accountants is a specialist chartered-accounting business that assists private businesses, private clients, and families to manage their business and personal financial affairs. The Kelly + Partners Tax Consulting Practice is respected as one of the foremost tax advisory firms in Australia and offers a full range of direct, indirect, and international tax services.
Tony Nunes has over 22 years’ experience in providing tax advice to clients, especially on issues affecting cross-border transactions, acquisitions and restructures, and on all aspects of structuring the ownership and financing of corporations and their operations. Contact Tony.