New business owner here, just started a small Cafe with 2 employees. I wanted to ask experienced business owners when you pay your employees wages how do you withheld there taxes? Do you have a separate account where you transfer everyone’s taxes? or do you just wait til the end of the financial year and start paying employee taxes etc….. same goes for GST as well? I hope my question sort of makes sense, I apologize in advance if it does not. Thank you.
The gst and payroll tax us budgeted into my week. I have a estimate of my gst that I need to pay per qrt and gst I can claim per qrt.
Once that figure is worked out I subtract or add to the payroll figure. In my case subtract, leaving me a average tax liability of $150 a week.
Just the way I do it .
Does your home loan for a redraw? As that is another option for saving the money
My suggestion would be to put tax, super and GST all together into a separate account.
It’s not your money anyway and much easier to keep aside when it’s not bundled in to your general account. Tax and super will need to be paid quarterly anyway, so you may as well pay your GST at the same time.
With GST I just make approximate payments to the ATO every 4 weeks or so, that way when the BAS is due, often I only have to throw in a few extra dollars. With interest rates where they are at the moment there is no point hanging onto it.
The number of small business owners I know that get into trouble because they use it as a short term loan, then don’t have the dollars to pay when its due.
Its not your money, so don’t come to rely on it.