Australian Taxation Issues - Assignment Example

ASSESSMENT PART A: Please define the following terminologies annual leave An annual leave is often given to full-time employees on a yearly basis. The said leave is good for four weeks with additional payment of no less than 17.5% on top the regular salary. An employee can avail of an annual leave after rendering service for the last twelve months. 2. different models for bonuses/incentives Some possible models for incentives include: gain sharing, profit sharing, employee share ownership and employee share option (ESOP). As for bonuses, there are also different types, namely: attendance bonus, profit-related bonus and performance bonus. 3. ex gratia payments An ex gratia payment is payment given by a company out of moral obligation to an employee. This payment is not a legal obligation but an act of goodwill made the company towards an employee who has been considered invaluable or loyal. It could also be a financial assistance to an employee who had been injured at work. 4. family/career’s leave A family/career leave is used by an employee when one needs time to attend to a personal obligation towards a family member. This leave is used as bereavement leave or sick leave by an employee to take care of a sick family member. In all states ( except NSW), this leave is good for five days. However, documentation such as medical certificate is needed to support this leave. 5. fringe benefits These are additional benefits given on top of salary such as sick leave or vacation leave for ordinary employees. However, corporate executives can also be given health club memberships, continuing education/ training or paid vacation to exotic places. These benefits are usually negotiable depending on the employer’s discretion. 6. long service leave A long service leave is granted to longstanding employees ( those who have provided service five years or more ) by a company. In the case of NSW, this leave is equivalent to two months paid leave after rendering ten years of service. Moreover, employees who have given five years of service to an employer is paid with a leave equivalent to one month salary . A pro rate payment is also given in certain cases such as dismissal ( except for misconduct), death or resignation. 6. salaries and wages Salary is a type of renumeration that employers give to their employees as a form of compensation for the services rendered. Salary is pay given for regular hours and also as common renumeration for professional and managerial jobs. Wages can be paid on different types: hourly, daily, weekly. 8. sick leave This is a type of leave that an employee can use when one is sick. The leave should be supported by document such as medical certificate to prove the existence of sickness. However, sick leave is consumed once an employee avails of a family/career leave . 9. superannuation This is a retirement scheme that includes pensions. The employers are mandated by law to make an additional payment that is based on the 9% of an employee’s salary and wages. This payment is called superannuation fund which can be given to the employee as long as he/she meets the conditions of release indicated in the Schedule. 10. novated leases (give 2 examples) According to privatefleet.com “A novated Lease is an agreement between your employer, yourself (the employee) and the financier, where the obligation to meet the repayments under the finance lease is with the employer”. Example of novated lease would be vehicle financing . Deductibles such as petrol or gas could also be on novated lease. Another example would be the purchase of laptops. PART B: 1. Workers Compensation Act 1987 ( NSW) This is administered by the Dept. Of Finance It is applicable to all workers in NSW No expiry date unless law is repealed 2. Superannuation Guarantee (Administration) Act 1992 Monitoring bodies: Australian Prudential Regulation Authority (APRA) Australian Securities and Investments Commission (ASIC) Australian Taxation Office (ATO) Superannuation Complaints Tribunal (SCT) Applicable to all employees in Australia Exceptions: Citizens 60 and above would have no tax in withdrawing their superannuation since July 2007 Source: Collinson, P (2004 ) 3. Australian Apprentices Bill 2009 People who would benefit: “The program delivers a personal benefit payment of $1,000 to eligible Australian apprentices in selected occupations following completion of the required level of sustainability related training.”( Mr. Coulton, 28 May 2009) Monitoring Agency: Government Programs under Skills for Sustainability for Australian Apprentices and Tools For Your Trade (under the Australian Apprenticeships Incentives Program) This is under the Ministry of Education and Ministry of Employment and Work Relations 1. Explain and provide 2 examples of how Awards and Agreements influence the remuneration processes. Awards usually contain the following conditions of employment: hours of work, leaves, pay rate, allowances, employment protection provisions, etc ( industrial relations.nsw.gov, Jan 19/09). Thus, the Awards specify the amount that is needed to pay a worker. Agreements influence the renumeration process since the contents of the awards determine the other working conditions that may not be included in the award. In short, both Awards and Agreements provide a clear guideline on compensation as well as other factors related to the occupation which is beneficial to both employees and employer. 2. Explain how the requirements of the Australian Tax Office influence the superannuation reporting (e.g. minimum percentages out of salary and wages), income tax, fringe benefits tax and bonus payments. The requirements imposed by the ATO to let’s say individuals is a good example of data mining. Everyone must comply with minimum requirements so that data would be valid or reliable. If a person honestly declares his taxable income, then the agency ( ATO ) can determine the right amount for income tax. Nobody would be under or over evaluated . Taxation is an important source of money for the government. In the case of superannuation, it is not only of monetary importance but assurance that retirees would be provided a comfortable life without putting much burden on the government. References: Awards and Agreeements. Retrieved on 5 Jan 2010 from http://www. Industrial relations. nsw.gov.au/Workers/Starting_work/Awards_and_agreements.html Collinson, P. ( Oct 2004) Australia May Hold Key to Pensions. Retrieved on 2 Jan 2010 from http://www. guardian. co.uk/money /2004/oct/12/ business.australia. Second Reading Speech - Social Security and Other Legislation Amendment (Australian Apprentices) Bill 2009. Speech. 28 May 2009. Retrieved on 03 Jan 2010 from http://www.deewr.gov.au/Ministers/Gillard/Media/ Speeches/ Pages/Article _090528_141036.aspx Novated Lease - Overview. Retrieved on 1 Jan 2010 from http://www.privatefleet. com.au /finance/novated-lease/. Workers Compensation Act 1987 No . 70. NSW legislation. Retrieved on 04 January 2010 from http://www.legislation.nsw.gov.au/scanview/inforce /s/1/?TITLE =%22Workers%20Compensation%20Act%201987%20No%2070%22&nohits Read More