Paid Parental Leave

Australia’s first national Government funded Paid Parental Leave (“PPL”) scheme is now law. The scheme kicks off from 1 January 2011 and provides mums or dads with 18 weeks of pay at the minimum wage. 

With the commencement date just around the corner, we thought it appropriate to briefly summarise the implications of the PPL scheme for both parents and employers.  

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Contractor vs Employee

Yet again the Tax Office are on their soapbox regarding the employee v independent contractor debate. A recent series of cases has made it very clear that the day of the “independent contractor” is numbered.  These cases involved market research interviewers, translators and a cutter and sewer. 

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Incorrect Payment Summaries

Many of you employ workers and therefore issue payment summaries (previously known as group certificates) to your employees. Hopefully you would have noticed a change to the 2010 payment summaries.  For the first time, employers are required to include the amount of any salary sacrificed superannuation contributions on an employee’s payment summary.  This is due to a change in the law which now states that the definition of income for many Government benefits “adds-back” any salary sacrifice contributions to your taxable income figure. 

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Salary Packaging Rental Property Expenses

From 1 July 2009, the law changed in regards to the definition of income for a wide range of Centrelink benefits. Now any net investment losses or net rental property losses are “added back” to your taxable income to arrive at the figure on which benefits are calculated. As a result, many people are now receiving less benefits.
However, there may be a solution! 

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