Tax time

I finally earned enough income from consulting that I needed to pay myself as an employee.

The last time I was self employed which was a long long time ago in the 90s this involved lots of paper forms and indeed when I created my company the ATO sent me stuff that was from exactly that era but this financial year they didn’t. They don’t want pieces of paper. They want electronic data uploaded directly into their computers.

As I mentioned previously I use Xero for my accounts. It’s very easy to set up and use, so I thought I would use the built-in payroll tools. This looked good until I realised that no matter what I couldn’t set the payroll module to use the “Wages Payable” account in the general ledger. It’s a leftover from a previous version of Xero. I had to manually create a new Wages Payable liability account and then I could select it from the Payroll module. Nasty.

Once I got through that things were fairly easy to get right and at any point I could nuke what I had done and start again.

In the modern era the ATO want to know that you have paid your employee’s superannuation entitlements. Someone dreamt up the idea that super funds should lodge this data with the ATO electronically and naturally, it being the second decade of the twenty first century, various organisations have sprung up to make this simple for self managed super funds and after doing some digging I found smsfdataflow who provide this as a FREE service. This looked much better than paying Australia Post or some other organisation some tens of dollars per year. Now I know that because it’s free I am the product but heck, I’m sure that if I paid those other organisations they would sell my email address to a bunch of advertisers anyway.

I entered all my details as an employee into Xero and told it to tell the ATO I’m an employee.

That worked.

I entered what I was paying myself and it worked out the statutory super contribution amount. I entered some other allowance and super details and set it in motion. This was harder than it should be for someone paying themselves as off end of financial year lump sum.

But it worked well enough.

I generated myself a payslip. Haven’t had one of those for 18 months.

I scratched around to work out how to get the PAYG Payment Summary out. That’s what us old folks call a Group Certificate.

It turns out that Xero does all of this automatically, emails it to your staff AND lodges it with the ATO as long as your browser has been set up with an “Auskey” to talk to the ATO. Even if it hasn’t you can load your Auskey into Xero with a bit of work.

I had to do a bit of messing about with the quarterly BAS and lodged that via the ATO site and all was done and dusted.

So Xero makes paying staff really easy. Makes me feel like employing someone!

On the other hand the ATO website is a piece of archaic puke. It doesn’t work with Chrome. It doesn’t work properly with Safari. It just barely works with Firefox. It runs on your computer under Java which every security professional loathes like a weeping sore in a swimming pool. blargh!

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