MAJOR LABOUR COSTS SURVEY - HELP PAGE
This page contains information designed to help businesses/organisations understand and complete the questions asked on the Major Labour Costs Survey for the financial year ended 30 June 2016. For general information about participation in business surveys, please see Frequently Asked Questions (FAQs) and for assistance with using the online survey form, please see eSurvey - Help.
If your question about the Major Labour Costs Survey is not answered, or if you believe your business/organisation has been incorrectly included, please contact the ABS on 1800 776 813 (Freecall excluding mobile phones).
What types of businesses/organisations are included in the survey?
All businesses/organisations in the private and public sectors are within the scope of the survey, except for the following:
- Division A Agriculture, Forestry and Fishing (excluding government organisations)
- ANZSIC Class 6330 Superannuation Funds
- ANZSIC Class 7552 Foreign Government Representation such as overseas embassies, consulates, etc.
- ANZSIC Subdivision 96 Private Households Employing Staff
- also excluded are members of the Australian permanent defence forces.
How was my business/organisation selected in the survey?
A sample of approximately 7,000 private and public businesses/organisations are randomly selected on the Major Labour Costs Survey. Selected businesses/organisations receive the survey questionnaire and represent other similar businesses/organisations in the same industry, employment size range, and state or territory. The sample is selected from the Australian Business Register which contains the names and addresses of all businesses/organisations that have registered an ABN with the Australian Taxation Office.
What is the survey reference period?
The reference period for the Major Labour Costs Survey is the financial year ended 30 June 2016. Number of employees is collected for the last pay period ending on or before 30 June 2016. Gross wages and salaries and other payments to employees are total payments made during the financial year ended 30 June 2016. If your business/organisation has more than one payroll, please report for all payrolls of the business/organisation as outlined in the address at the beginning of the form.
What if my business/organisation did not operate during the reference period?
If the business/organisation you are reporting for has ceased operating or did not operate during the reference period, please notify the ABS on 1800 776 813 (Freecall excluding mobile phones). In order for the ABS to determine the correct course of action for this business/organisation, you will be asked a few questions (for example, when did the business/organisation last operate?).
What is a not-for-profit organisation? (Q2)
According to the Australian Taxation Office (ATO), a not-for-profit (NFP) organisation does not operate for the profit or gain of its individual members, whether these gains would have been direct or indirect. An NFP organisation is not an organisation that hasn't made a profit. ATO accepts an organisation as NFP where its constituent or governing documents prevent it from distributing profits or assets for the benefit of particular people – both while it is operating and when it winds up.
How should I report the number of employees? (Q3)
Question 3 is a count of all employees who received pay for any part of the last pay period ending on or before 30 June 2016. You should report for the last pay period in June 2016 even if this is not the last pay period in your financial reporting year.
The following should be excluded:
- owner-operators or partners of an unincorporated business
- non-salaried directors
- contractors and subcontractors who have their own ABN and are paid on a fee for service or commission only basis
- if the business/organisation paid another business for contract staff, and those persons were on the payroll of the other business, then this type of contractor is not deemed to be an employee of the business/organisation.
The following should be included:
- salaried directors of Pty Ltd companies
- if a business/organisation hires staff for a limited period of time and they include these staff on their payroll, that is, they pay the staff entitlements directly to the contractor, then this type of contractor is deemed to be an employee of the business/organisation.
REPORTING GROSS WAGES AND SALARIES
How should I report gross wages and salaries paid to employees? (Q4)
Question 4 collects the total taxable gross wages and salaries paid to employees, before taxation and any other deductions have been made. Gross wages and salaries paid to employees excludes payments to contractors or sub-contractors operating under their own ABN. Payments made to another (related or unrelated) business for the supply of staff on a fee or contract basis, where the staff entitlements are paid by the business supplying the employees, are excluded and should not be counted as gross wages and salaries paid to employees.
REPORTING SEVERANCE, TERMINATION AND REDUNDANCY PAYMENTS
How should I report severance, termination and redundancy payments? (Q6)
The following should be excluded:
- accrued leave entitlements paid on termination should be included in (Q4)
- amounts paid out of superannuation funds and industry termination funds not directly paid by the employer.
FRINGE BENEFIT AND FRINGE BENEFITS TAX
What is a fringe benefit and fringe benefits tax?
A fringe benefit is a 'payment' to an employee in a form other than salary or wages. Examples of fringe benefit include the provision of a work car for private purposes, and benefits provided under a salary sacrifice arrangement. Fringe Benefits Tax (FBT) is a tax employers pay on certain benefits they provide to their employees, their employees’ family or other associates. The benefit may be in addition to, or part of, their salary or wages package. FBT is separate to income tax and is calculated on the taxable value of the fringe benefits provided.
REPORTING SALARY SACRIFICED EARNINGS
What is salary sacrificed earnings?
It is an arrangement between an employer and an employee, where the employee agrees to forgo part of their future entitlement to salary or wages in return for the employer providing them with benefits of a similar value. These benefits can qualify as fringe benefits and be subject to fringe benefits tax.
How should I report salary sacrificed earnings? (Q7, Q8)
Salary sacrificed for superannuation should be included in (Q7a).
Information supplied on Pay as You Go (PAYG) payment summaries and/or the 2016 Fringe Benefits Tax (FBT) return can be used to complete (Q7b(i)). The amount reported should not be 'grossed up' but should include the FBT incurred. Any remaining salary sacrificed that is excluded in (Q7a) and (Q7b(i)) should fall under (Q7b(ii)) Other salary sacrificed earnings. This includes all FBT exempt benefits such as portable electronic devices, computer software and tools of trade.
For (Q8), earnings salary sacrificed to employee shares or stock options should include any FBT incurred. Shares or stock options are classified as property fringe benefits and are subject to FBT.
REPORTING REIMBURSEMENTS RECEIVED FROM GOVERNMENT EMPLOYMENT PROGRAMS
How should I report reimbursements received from government employment programs for wages and salaries? (Q10)
This question refers to instances where some businesses/organisations employ particular people for whom the Government reimburse them for the wages and salaries. Examples of these programs include:
- government run apprenticeship/traineeship programs
- schemes such as Restart where employers are encouraged to employ people who are having difficulty entering (or re-entering) the workforce
- Parents Wage Subsidy.
REPORTING PAYROLL TAX FOR EMPLOYEES
How should I report payroll tax for employees? (Q12)
Payroll tax is payable when an employer's (or 'group of employers') total wages or salaries exceeds the general deduction threshold level in its state or territory of operation. Employers may claim exemptions for some categories of employees. Religious, not-for-profit and general government organisations are generally exempt from payroll tax.
Pay as You Go income tax is a federal tax payable to the Australian Taxation Office based on employee earnings and should be excluded.
Rebates/Reimbursements which may relate to previous years but have been received during the reference period 1 July 2015 to 30 June 2016 are to be deducted from the total amount reported.
REPORTING EMPLOYER CONTRIBUTIONS PAID TO SUPERANNUATION SCHEMES
How should I report employer contributions paid to superannuation schemes on behalf of employees? (Q13)
Employer contributions and shortfalls paid under the Superannuation Guarantee Charge (SGC) legislation should be included in (Q13). Any superannuation payments made in respect of workers who were not employees as described in (Q3), such as contractors, should be excluded. Employer contributions under salary sacrifice arrangements should be included in (Q7a) salary sacrificed for superannuation.
REPORTING WORKERS COMPENSATION
What is a self insurer? (Q14)
A self insurer is a business/organisation that provides insurance to its own workers and manages their compensation claims. It should be registered as a 'self insurer' with a relevant government body. Most states and territories allow very large employers to self insure. Workers compensation costs are borne by self insurers except in extreme circumstances.
How should I report workers compensation premiums, fees or levies paid? (Q15)
Workers compensation costs comprise, in general, the costs of insurance premiums paid plus any other costs not reimbursed by insurers. Premium rates are usually determined by considering the industry of the employer and the employer’s previous claims history. Non-reimbursed costs may vary depending on the legislation which applies in each state, but can include wages and salaries, other costs such as medical and legal costs, and lump sum settlement payments.
The following should be included in (Q15):
- premiums paid to an insurance company (or governing body in the case of a self insurer)
- fees - including bank charges relating to a guarantee for funds
- any levies paid.
Any premiums paid in respect of workers who were not employees as described in (Q3), such as contractors, should be excluded.
How should I report workers compensation payments and costs? (Q16, Q17)
Payments related to workers compensation paid through the payroll should be included in (Q16). Gross wages and salaries relating to workers compensation may continue to be paid through the payroll and may (either in part or full) be reimbursed by the insurer at a later date. Amounts reimbursed during the reference period 1 July 2015 to 30 June 2016 are to be included in (Q18).
Costs related to workers compensation not paid through the payroll should be included in (Q17). Main costs reported for this question would normally be related to medical expenses such as payments made to a third party medical services provider.
How should I report reimbursements received from this business’s/organisation’s insurer for payments made in relation to workers compensation? (Q18)
Reimbursements for both payroll and non-payroll payments in relation to workers compensation should be included. All reimbursements received during the reference period 1 July 2015 to 30 June 2016 should be included, irrespective of the claims period to which they relate.