Payroll: GST, PAYG, WET, LCT, Fuel Tax Credit

This article provides guidance on managing payroll, tax codes, worksheet classification, and more. It covers topics such as GST, PAYG, WET, LCT, and Fuel Tax Credit. The article is relevant for students studying payroll management and related courses. The content is sourced from Desklib, an online library for study material with solved assignments, essays, dissertation etc.

Running head: PAYROLL
Payroll
Name of the Student:
Name of the University:
Authors Note:

1
PAYROLL
Contents
Part A:..............................................................................................................................................3
Task 1:.........................................................................................................................................3
Task 2:.........................................................................................................................................3
Task 3:.........................................................................................................................................6
Task 4:.........................................................................................................................................7
Task 5:.......................................................................................................................................11
Task 6:.......................................................................................................................................15
Task 7:.......................................................................................................................................20
Task 8:.......................................................................................................................................24
Task 9:.......................................................................................................................................26
Part B:............................................................................................................................................28
Task 10:.....................................................................................................................................28
Task 11:.........................................................................................................................................30
Task 12:.....................................................................................................................................31
Task 13:.....................................................................................................................................32
Task 14:.........................................................................................................................................33
Task 15:.....................................................................................................................................34
Task 16:.....................................................................................................................................36

2
PAYROLL
Task 17:.....................................................................................................................................38
Task 18:.....................................................................................................................................39
Task 19:.....................................................................................................................................40
Final assessment 2:........................................................................................................................41
FBT & Superannuation:.............................................................................................................41
Lodge Activity Statement:.........................................................................................................41
GST classifications:...................................................................................................................41
BAS case study:.........................................................................................................................42
PAYG installment:.....................................................................................................................49
Adjustments:..............................................................................................................................51
Handle payroll queries:..............................................................................................................52
Processing payroll:.....................................................................................................................52
References:....................................................................................................................................55

3
PAYROLL
Part A:
Task 1:
(a)
Most of the businesses are affected by Goods and Services Tax (GST) and thus, should be
registered for GST. Following is the threshold turnover limit for different business for GST in
Australia:
I. Annual turnover of $75,000 or more for General businesses.
II. In case of non-profit organization the threshold annual turnover limit is $150,000.
III. Taxi drivers must register for GST irrespective of the annual GST turnover (Ramli et. al.
2015).
(b)
Businesses with aggregate annual turnover less than $10 million are allowed to use wither cash
or accrual basis of accounting.
(c)
Business with annual aggregate turnover of in excess of $10 million must use accrual basis of
accounting for GST purposes.
Task 2:
Supply Tax codes
Taxable (10% GST-free Input taxed Exempt

4
PAYROLL
rate)
Superannuation,
wages paid /
received
X
Supplies out for
exported goods
and services
X
Residential rent
income or
expenses
X
Money lent/
borrowed
X
Fresh food or
medicines
X
Purchase or sale
of an assets
X
Commercial rent
income or
expenses
X
Education and X

5
PAYROLL
childcare
Depreciation X
Council rates X
Fruit sales X
Received of
interests
X
Rental income
(Commercial)
X
Electricity
expenses
X
Milk purchased X
Purchase of
office furniture
X
Bank charges X
Oranges sold
(bag of oranges)
X
Payment of
interests
X

6
PAYROLL
Payment of
stamp duty
X
Payment of
water rates
X
Task 3:
(a)
Part (i):
Sales:
The invoice dated 13th May shall be reported in 4th quarterly period applicable for the month of
April, May and June and for other two invoices the 1st quarterly period in respect July, August
and September shall be used.
Part (ii):
Sales:
For all invoices of sales 4th quarterly period applicable for the month of April, May and June
(Ling et. al. 2016).
(b)
(i): GST payable under cash basis is $100.

7
PAYROLL
(ii): GST payable under accrual basis is calculated as following.
GST payable Amount
($)
Total sales inclusive GST 19,800.
00
GST payable for sales (19800 x 1/11) 1,800.
00
Total purchases 15,400.
00
GST paid on purchases (15400x 1/11) 1,400.
00
Net GST payable (1800 - 1400) 400.
00
Task 4:
PAYG instalment income
Particulars Amount
($)
Sales 55,000.

8
PAYROLL
00
Commercial rent received 22,000.
00
Interest received 1,200.
00
Dividend income 3,300.
00
(a) PAYG Instalment income 81,500.
00
Instalment rate 6.20%
(b) PAYG income tax instalment 5,053.00
(c)
PAYG instalment income
Particulars Amount
($)
Sales 55,000.
00
Commercial rent received 22,000.

9
PAYROLL
00
Residential rent received 8,800.
00
Interest received 1,200.
00
Dividend income 3,300.
00
Sale of business printer 2,200.
00
Sale of shares 4,400.
00
Instalment income (22000+8800+1200) 81,500.
00
Instalment rate 0.
06
PAYG instalment income (32000 x 11%) 5,053.
00
(d)

10
PAYROLL
Amount to be reported in at G1 label of BAS is $96,900.
Task 5:
Quarterly GST report and pay
Particulars Amount ($)
G1 62,221.25

11
PAYROLL
(61231.25+990)
G2 770.00
G3 462.55
G10 2,200.00
G11 13,311.59
Amount you owe the ATO
Particulars Amount
($)
1A 5,566.
48
1C
1E
4.00 2,899.
00
5A 2,918.
18
6A 3,000.

12
PAYROLL
00
7C
8A 14,432.
58
Amount the ATO owes you
Particulars Amount
($)
1B 1,410.
14
1D
1F
5B
6B
7D 48.
93
8B 1,459.
07
9. Payment 13,083.

13
PAYROLL
51
Reconciliation:
Since no information about PAYG instalment income is available about Balance sheet hence, no
reconciliation is necessary.
Particulars Amount
($)
GST Collected (62221.25/11) 5,656.
48
GST paid (43325.19 +2200) /11 4,138.
65
GST payable 1,517.
82
GST control as per Balance sheet is not possible due to lack of information. Hence,
reconciliation with Balance sheet is not required (Australia, 2016).

14
PAYROLL
Task 6:

15
PAYROLL
Quarterly GST report and pay
Particulars Amount
($)
G1 170,430.

16
PAYROLL
00
G2
-
G3 36,700.
00
G10 15,400.
00
G11 42,684.
00
PAYG tax withheld
Particulars Amount
($)
W1 5117
W2 1236
W4 0
W3 0
W5 1236
PAYG income tax instalment

17
PAYROLL
Particulars Amount
($)
T7 2322
Amount you owe the ATO
Particulars Amount
($)
1A 12,157.
27
4.00 1,236.
00
5A 2,322.
00
7.00
-
8A 15,715.
27
Amount the ATO owes you
Particulars Amount

18
PAYROLL
($)
1B 3,880.
36
5B
-
8B 3,880.
36
Payment
Amount payable to ATO (15715.27-3880.36) 11,834.
91
Task 7:
Part (a)
Classification of worksheet (output)
Accounts Output Taxable Exports GST free Input
taxed
Excluded
Commercial rent 6,600
.00
6,600.
00

19
PAYROLL
Residential rent 7,700
.00
7,700.
00
Sale of goods and
services
51,100.
00
51,100.
00
Interest 480
.00
480.
00
Dividends 18,000.
00
18,000.
00
Export sales 660
.00
660.
00
Sale of old photocopier 4,619
.00
4,619.0
0
Total 89,159.
00
76,180.
00
660.
00
7,700.
00 -
4,619.0
0
GST classification for
worksheet
G1 G6 G2 G3 G4
Classification of worksheet (input)
Accounts Amount Capital
purchases
Non-
capital
Taxable
supply
Inpu
t
GST
free
Exclude
d

20
PAYROLL
taxed
Wages & salaries 60,000.
00
60,000.
00
Stationery 4,400
.00
4,400.
00
Depreciation 5,000
.00
5,000.
00
Accounting fees 3,300
.00
3,300.
00
Electrical repair 550
.00
550.
00
Premiums for business
insurance
220
.00
220.
00
General expenses 990
.00
990.
00
Bank charges 7
0.00 70.0
0

21
PAYROLL
Operating cost of
motor vehicle
990
.00
990.
00
Telephone 550
.00
550.
00
Council and water
rates
330
.00
330.
00
Residential rent
expenses
450
.00
450.
00
Fees for membership 6
6.00
66.
00
Contributions to
superannuation fund
1,970
.00
1,970.
00
Purchase of inventory 7,700
.00
7,700.
00
Commercial rent
expenses
460
.00
460.
00
Up-date of computer
system
12,147.
00
12,147.
00
Purchasing new printer 3,300 3,300.

22
PAYROLL
.00 00
PAYG withholding 14,000.
00
14,000.
00
Totals 116,493.
00
15,447.
00
12,100.
00
74,030.
00 70.0
0
330.
00
14,516.
00
GST classification G10 G11 G17 G13 G14
Part b:
Items Amount ($) Items Amount ($)
G1 89,159.00 G10 17,417.00
G2 660.00 G11 83,700.00
G3 7,700.00 G12 101,117.00
G4 - G13 70.00
G5 8,360.00 G14 330.00
G6 80,799.00 G15 -
G7 - G16 400.00
G8 80,799.00 G17 100,717.00

23
PAYROLL
G9 7,345.36 G18 -
G19 101,177.00
G20 9,197.91
Net GST payable (G9 - G20) (1,852.55)
Part c:
It is clear from the extract of forecasted cash flows that the closing balances in October and
November would be in negative. Thus, the client should defer the payment of September quarter
to ensure that the closing balances at the end of October and November are appropriate for the
client to meet cash requirements of business.
Task 8:
Particulars Amount
Luxury car threshold 75,526.00
Motor vehicle for sale GST 85,200.00
LCT rate 33%
Amount in excess of threshold (GST inclusive) 9,674.00
Amount in excess of threshold (GST exclusive) 1,928.55

24
PAYROLL
Apply LCT to excluded amount 636.42
whole dollars only at LCT at 1E on BAS summary 636.00
New sale price 84,564.00
Wine Equalisation tax:
Part a:
The half retail price method
Particulars Amount
($)
Taxable win supllies 70,404
.00
WET rate 29%
Taxable value under half retail price
method
35,202
.00
WET (35202 x 29%) 10,208
.58
Part b:

25
PAYROLL
28th of succeeding month of the end of the financial year.
Fuel tax credit:
Litres of diesel used (392000/1.42) 276,056.34
Litres of unleaded used (120800/1.29) 93,643.41
Total litres used 369,699.75
Fuel tax credit in $ (369699.75 x 40.10/100) 148,249.60
Task 9:
a. Helps in maintaining the books of accounts of an organization by proper classification of
accounts. The financial statements preparation and presentation can also be improved by using
the services of bookkeeping business.
b. By verifying whether all the guidelines of Australian Taxation Office have been followed in
preparation of LAS.
c. To record payment the specific tax account is debited by crediting equivalent amount of cash.
And for refund the cash is debited by crediting equivalent amount in tax refund (Grey, 2017).
d. SAGE, SAP and MYOB.
e.
I. Section 14 of the Privacy Act 1988 prohibits.
II. Professional ethics and integrity.
f. A person must be awarded with Certificate IV Financial Services from a Registered Training
Organization (RTO).

26
PAYROLL
g.
I. Division 17 of Income Tax Assessment Act 1997 discusses the effects of GST.
Error item no. Appropriate course of action
1 Lodgement of revised activity due to error
2 Decreasing adjustments.
3 Lodgement of revised activity due to error
4 Increasing adjustments.
5 Increasing adjustments.
Part B:
Task 10:
Australian Business Number (ABN):
Issued by Australian Business Registrar, ABN is a unique identifier for businesses in Australia
referred in taxation matters and documents filed with Australian Taxation Office.
TFN declaration:
A unique identification number issued by the Tax auditory of Australia to the tax payer. It is
needed to be mentioned in tax filing and other tax related matters.

27
PAYROLL
HELP:
A network of accredited volunteers for tax related matters provide help to the people in relation
to tax related matters in the country.
Medicare Levy:
To give all Australians access to health services Medicare Levy is charged on the taxable income
of tax payers in the country. Current 2% of taxable income subjected to maximum amount is
charged in taxable income of individuals in the country.
ATO PAYG withholding tax laws:
Employers required to withhold PAYG from the gross salary and wages payable to the
employees and deposit the same to the credit of the Government on or before the due date.
Australian Bureau of Statistics (ABS):
ABS is a Government agency of Australia responsible to collect and process data to provide
important information to various branches of Australian governments.
ATO fringe benefits tax laws:
Often employers provide non-monetary benefits to employees. Such benefits are liable to be
taxed in the hands of the employer under Fringe Benefits Tax. The law governing tax on fringe
benefits are FBT tax laws.
ATO superannuation laws:

28
PAYROLL
Employers and employees required to contribute to superannuation funds to fund the retirement
pension of employees in the future. Employers must contribute 9.5% of gross salary whereas
employees are inspired to contribute equal amount in the fund as per the superannuation law.
Tax Agent Services Act 2009:
The act contains the provisions to be followed by the tax agents while providing services to the
tax payers in the country.
Industry awards:
Industry awards are given to the business organization that have excelled in various aspects of
business including complying with tax provisions and rules.
Leave act:
The employees in Australia are allowed to take annual, sick and long service leave. The
employers are obliged to pay for these leaves if taken by the employees as per the provisions of
leave act.
Payroll tax laws:
The enactment guiding the provisions in respect of payrolls of employees and workers in
Australia is collectively called Payroll tax laws.
Privacy Act 1988:
Privacy Act 1988 governs the privacy protection law in relation to confidential information of
individuals and businesses.

29
PAYROLL
Workers compensation and occupational health and safety:
The environment at the workplace must be suitable for the health of workers and employees. The
occupational health and safety of the workers must be given due importance in business.
OHS acts and regulations:
Work Health and Safety Act governs the provisions in relation to the health and safety of
workers and employees at the work place.
Task 11:
a. An individual must register with Tax Practitioners Board of Australia in order to be a tax
agent in the country. following are the requirements to become a tax agent in the country:
i. The individual must be 18 years or above.
ii. The individual must be mentally fit and healthy person.
iii. The qualification and experience requirements must be satisfied by the
individual.
iv. Must maintain professional indemnity insurance.
v. Must complete an online application.
vi. Must submit all necessary documents.
b. A person must obtain Certificate IV Financial Services from a Registered Training
Organization (RTO).
c. Yes.
d. BAS agent can provide payroll services by accepting fees without requiring to register
with Tax Practitioners Board.
e. Apart from BAS agent, qualified accountant and experts on payroll services are allowed
to provide payroll services.

30
PAYROLL
Task 12:
Employee TFN
quoted
Taxfree
threshold
Weekly
wages
PAYG
tax
HELP Net
wages
A Matador N N 431
.00
202
.00 -
229
.00
L Liverstrong Y Y 687
.00
77
.00 -
610
.00
Robbie McEven Y N 775
.00
226
.00 -
549
.00
Cadel Stevens Y Y 690
.00
78
.00 -
612
.00
Stuart McGrady N N 520
.00
244
.00 -
276
.00
Task 13:
Annual
income
Resident
status
TFN Pay
frequency
Pay
Frequenc
y Gross
Withholdin
g tax
Yearly
withholding
tax

31
PAYROLL
18,200.
00
NR NQ Weekly
350
157.00 8,164.00
182,000.
00
R Q Forth
Nightly
7,
000
2,258.00 58,708.00
76,000.
00
R NQ Forth
Nightly
2,
923
1,373.00 35,698.00
92,000.
00
R Q Weekly 1,
769
450.00 23,400.00
90,000.
00
NR Q Forth
Nightly
3,
462
1,126.00 29,276.00
45,000.
00
R Q Weekly
865
136.00 7,072.00
36,000.
00
NR Q Weekly
692
225.00 11,700.00
25,000.
00
R Q Weekly
481
30.00 1,560.00
32,000.
00
R Q Weekly
615
62.00 3,224.00

32
PAYROLL
Task 14:
Annual
income
Resident
status
Medicar
e Levy
Medicare
Surcharge
18,200.
00
NR
- -
182,000.
00
R 1,840.
00
1,380.
00
76,000.
00
R
- -
92,000.
00
R 40
.00
30
.00
90,000.
00
NR
- -
45,000.
00
R
- -
36,000.
00
NR
- -
25,000.
00
R
- -

33
PAYROLL
32,000.
00
R
- -
Task 15:
Company details: ABN 99 999 999 999 was invalid hence, 78 999 999 999 was used.
Opening balance input:

34
PAYROLL
Employee details:

35
PAYROLL
Task 16:

36
PAYROLL
Task 17:

37
PAYROLL
Task 18:
Part 1:
I. Superannuation payable for the two weeks $9,755.54.
II. $18,087 is the amount of PAYG withheld.
Part 2:
Only the details of the employee can be provided to him and not that of his wife.
Part 3:
3 days of leave with pay shall be allowed in case sickness.

38
PAYROLL
Part 4:
To enquire about the matter with payroll department.
Task 19:
PAYG tax withheld
Salary, wages and other
payments
W1 70,104.15
Amount withheld W2 18,087.00
Amount withheld where NO
ABN was provided.
W3 5,243.00
Other amounts withheld W4 3,100.00
Total amount withheld W5 18,430.00
Superannuation guarantee is calculated by using the rate of contribution made the employees and
employees on the superannuation fund.
a.
b. At-least for three years.
c. Permanent hourly rate plus 25% to 25% of hourly rate.

39
PAYROLL
Final assessment 2:
FBT & Superannuation:
Answer 1:
Business organization must prepare FBT return and pay FBT tax to the Government as per the
provisions of FBT on or before the due date. .
Answer 2:
GST free sales is for items in which there is no GST whereas input taxed is supply where sellers
have no right to charge GST.
Answer 3:
No superannuation guarantee amounts are not subjected to GST.
Answer 4:
Yes, superannuation guarantee amount is reported in BAS.
Lodge Activity Statement:
1. No an unauthorized person cannot sign off BAS.
2. Immediate person next in the hierarchy after the manager.
GST classifications:
3. Taxable 10% rate.
Supply Taxable GST Input Exempt

40
PAYROLL
(10%) free taxed
Wages or superannuation X
All supplies out of exported goods or
services
X
Residential rent income or expenses X
Money lent or borrowed X
Domestic water sales X
Purchase or sale of assets X
Commercial rent income or expense X
Childcare and education X
Depreciation X
Council rates X
BAS case study:
(a)
Classification of
worksheet

41
PAYROLL
(output)
Accounts Output Taxable Exports GST free Inpu
t
taxe
d
Excluded
Sale of goods
and services
440,000
.00 440,000.0
0
Export sales 7,700
.00 7,700.0
0
Other GST free
sales
6600 6600
Commercial
rent
99,000
.00 99,000.00
Residential rent 22,000
.00
22,000.
00
Sale of assets 5,500
.00 5,500.00
580,800 28,600.

42
PAYROLL
.00 544,500.0
0
7,700.0
0
00 - -
GST
classification for
worksheet
G1 G6 G2 G3 G4
Classification
of worksheet
(input)
Accounts Amount Capital
purchases
Non-
capital
Taxable
supply
Inp
ut
taxe
d
GST free Exclud
ed
General
business
expenses
220,000
.00
220,000.
00
Business
council Water
rates
2,200
.00
2,2
00.00
Depreciation 4,400 4,400

43
PAYROLL
.00 .00
Commercial
rent expenses
9,900
.00
9,900
.00
Residential rent
expenses
4,400
.00
4,4
00.00
Purchase of fax
machine
2,200
.00 2,200.00
Wages and
salaries
88,000
.00
88,0
00.00
Superannuation 7,920
.00
7,9
20.00
PAYG tax
withheld
25,000
.00
25,0
00.00
Totals 364,020
.00 2,200.00 -
234,300.
00 -
127,5
20.00 -
G10 G11 G17 G13 G14 Exclud
ed
Items Amount Items Amount ($)

44
PAYROLL
($)
G1 580,800.
00
G10 2,200
.00
G2 7,700.
00
G11
-
G3 28,600.
00
G12 2,200
.00
G4
-
G13
-
G5 36,300.
00
G14 127,520
.00
G6 544,500.
00
G15
-
G7
-
G16 127,520
.00
G8 544,500.
00
G17 (125,320.
00)
G9 49,500.
00
G18
-

45
PAYROLL
G19 108,980
.00
G20 9,907
.27
Net GST payable (G9 - G20) 39,592.
73
Payment due date: Due date for different quarters are as following:
1st Quarter: 28 October.
2nd Quarter: 28 February.
3rd Quarter: 28 April.
4th Quarter: 28 July.
Journal entry:
Date Account titles and
explanations
Debit ($) Credit ($)
28th July GST payable 39593.00
Cash 39593.00
(Being GST payable

46
PAYROLL
paid)
PAYG Withholding:
a. Correct amount of PAYG withholding in this case $192.00.
b. NO amount to be withheld in this case.
c. Correct amount of PAYG withholding in this case $98.00.
d. Correct amount of PAYG withholding in this case $11.00.
e. Correct amount of PAYG withholding in this case $132.00.
Cash flow:
Part a:
The deteriorating cash position of the client shall be specifically asked to be considered while
making the payment. Thus in case there is any opportunity to use tax credit to reduce the
payment of GST the same shall be taken.
Part b:
The company should use cash basis accounting to avoid payment of GST at present.
PAYG installment:
Part a:

47
PAYROLL
Particulars Amount
($)
Amount ($)
Total revenue 96,9
00.00
Less: Capital and non-applicable items
Sale of business printer 2,200.
00
Bank loan 4,400.
00
Residential rent received 7,700.
00
14,3
00.00
PAYG Instalment Income 82,6
00.00
Part b:
PAYG Income tax instalment (82600 x 6.20%) 5,1

48
PAYROLL
21.20
Part c:
Particulars Amount
($)
Amount ($)
Total revenue 96,9
00.00
Less: Capital and non-applicable items
Sale of business printer 2,200.
00
Bank loan 4,400.
00
Residential rent received 7,700.
00
14,3
00.00
PAYG Instalment Income 82,6
00.00
PAYG Income tax instalment (82600 x 6.20%) 5,1

49
PAYROLL
21.20
Adjustments:
Error item no. Appropriate course of action
1 Increasing adjustments.
2 Increasing adjustments.
3 Lodgement of revised activity due to error
Handle payroll queries:
d. Only the details of the employee can be provided to him and not that of his wife.
e. Superannuation guarantee is calculated by using the rate of contribution made the employees and
employees on the superannuation fund.
f. 5 days of leave with pay shall be allowed as compassionate leave.
g. At-least for three years.
h. Permanent hourly rate plus 25% to 25% of hourly rate.
Processing payroll:
Employer: Sam Waterford

50
PAYROLL
ABN of Employer: 11 111 111 111 111
Employee: C Border
Week ending: 30 June
Date of pay: June 30
Earnings Hour rate Hours Amount ($)
Normal 5
7.00
2
6.32
1,500.00
Overtime (1.5)
Overtime (2.0)
Personal leave 5
7.00
1
7.54
1,000.00
Annual leave
First aid allowance
Gross Pay 2,500.00
PAYG deduction 744.00
Deduction
Social club 2.00

51
PAYROLL
Super
Union
Net pay 1,754.00
Super fund: Sun Super fund Amount

52
PAYROLL
References:
Australia, C.C.H., 2016. Australian Master Tax Guide: 2016. CCH Australia.
Grey, C., 2017. Corporate tax residency after Bywater Investments. Taxation in
Australia, 51(10), p.547.
Ling, S.C., Osman, A., Muhammad, S., Yeng, S.K. and Jin, L.Y., 2016. Goods and Services Tax
(GST) compliance among Malaysian consumers: The influence of price, government subsidies
and income inequality. Procedia Economics and Finance, 35, pp.198-205.
Ramli, R., Palil, M.R., Hassan, N.S.A. and Mustapha, A.F., 2015. Compliance costs of Goods
and Services Tax (GST) among small and medium enterprises. Jurnal Pengurusan (UKM
Journal of Management), 45.