With the new financial year well and truly in swing, it is imperative that your business is aware of all the changes and obligations as an employer. Below is a comprehensive list for business owners to consider and discuss with their bookkeepers.
The Changes:
Superannuation Guarantee (SG) Rate
- Increasing to 10.5% from the first payevent in the new financial year. (there will be increments of 0.5% each year to 12.0%)
Abolishment of $450 ($350 if in Hospitality Industry) and Threshold to SG
- SG is now payable on the first dollar earned.
- For employees under 18 years – they must work more than 30 hours in one week.
Superannuation Work Test for under 75
- Will no longer have to meet a work test to make or receive contributions.
Fair Work Minimum Wage Increases
- FWO advised the new minimum wage to increase by 5.2%. The new hourly rate is $21.38 per hour. $812.44 per week, based on 38 hours per week.
- Award minimum wages will increase by 4.6%, which is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for a full-time employee.
- Check with your Bookkeeper or HR Department regarding the Award to ensure your business is compliant with any other employment condition changes. To check your award visit: Awards – Fair Work Ombudsman
Redundancy Tax Free Lump Sum Threshold
- Increases to $11,591.00 +$5,797.00 for each completed year of service.
Employment Termination Payment (ETP) Cap Threshold
- Increases to $230,000.00 (Life & Death).
- The total Income WOI remains $180,000.00.
Payroll Tax (Vic Only)
- Annual deduction $700,000.00.
- Monthly deduction $58,333.00 4.85%.
- Regional Employers 1.2125%.
Mental Health and Wellbeing Surcharge (Vic Only)
- Annual threshold of $10M.
- Monthly threshold of $833,333.00.
- 5% of Victorian taxable wages over $10M with an additional 0.5% of taxable wages over $100M.
- Note: For the transitional period (1 January 2022 to 30 June 2022) the respective annual thresholds are $5M and $50M.
Payroll Tax (WA only)
Quarterly payroll tax return lodgement threshold changes:
- Increases from $100,000 to $150,000.
- Payroll with annual liability of up to $150,000 will have the option to pay quarterly rather than monthly.
Living Away from Home Allowance (LAFHA)
- This changes in March each year.
- Check with your Bookkeeper to ensure the correct amount is being paid.
- ICB – Living Away From Home Allowance (LAFHA)
- TR 2021/4 | Legal database (ato.gov.au)
ATO Cents per Kilometre currently 0.72c – For up to 5,000 Business kms
- Increases to 0.78c.for up to 5,000 business kms.
Luxury Car Tax
- Fuel efficient vehicles. $84,916.00
- All other vehicles $71,849.00
- LCT rate of 33% – LCT rate of 33% remains unchanged.
GST Car Limit
You can only claim up to the ATO GST Limits these have been increased to:
- 2022/223 $64,741.00.
- GST $5,885.00 (maximum claimable).
However, the full value of the car is still an asset to the business.
Fuel Tax Credits
Fuel Tax Credits excise was halved by the government and this ceases on 30th September 2022 at 11.59pm.
Fringe Benefits Tax
- FBT Rate to 31st March 2023 – 47%
- Type 1 higher gross-up rate 2.0802%
- Type 2 lower gross-up rate 1.8868%
MYTH BUSTER
Myth:
My business can claim a deduction for SG payments up until 30th June, providing the payment is made by the 30th of June.
The Truth:
In order for a business to claim a deduction for SG payments in June for the financial year, they need to be paid BEFORE the superfund cut off date. The employees superannuation fund must receive the payment before the 30th of June. If using the ATO Small Business Superannuation Clearing House (SBSCH), the last day for making payment is Friday 24th June.
Please also be aware that this may mean your business will pay 13 SG contributions that year and may impact employees who have reached their $27 500 threshold.
