Awards

Australia's workplace laws are complex, and there are always difficulties in interpreting the 122 Modern Awards.

So, many employers pay an annual salary.  Problem solved!

Not quite.  There was a recent decision in WA under the Clerks-Private Sector Award.  The employer issued a contract confirming the salary of $78,000 included all entitlements which may become payable.  The Award for a Level 5 employee is $47,008.

So, that means this particular employee received $31,000 more than the award entitlement.  However, Award-covered employees receiving an annualised salary is fairly risky, in part because many of the Awards impose very strict rules about annualised salaries.

From that Clerks Award an employer is permitted to pay an annual salary for provisions including the minimum weekly wage, allowances, overtime, penalty rates, and leave loading.  However, the employer , must advise in writing which of the provisions will be satisfied by the annual salary.

Because this condition was not met, and even though the employee was paid well above the award, she was allowed to pursue a claim for underpayments relating to overtime and meal breaks.

The message is:  Have employment contracts drawn up and/or checked for possible breaches (perhaps "overtime is limited to X hours per week").  Your solicitor could provide this, and there are some other suppliers who sell employment and contractor agreements (call us for details).

GST Attribution  (when you can claim a GST credit)

Generally, attribution depends on whether the enterprise is on a Cash basis (claim GST when the item is paid for) or Accruals basis (claim when the goods or services are acquired, not necessarily paid for).

However, whichever basis is used, a tax credit cannot be claimed unless a tax invoice is held when the applicable BAS is lodged.  If one is not held, when the taxpayer eventually obtains the tax invoice, it can claim in that subsequent BAS, but only up to the four year limit.

If a taxpayer simply overlooks an invoice for a BAS, it can either go back and amend the relevant BAS, or claim in a later tax period.