Financial Goal Setting

In last weeks Blog, we discussed the importance of setting resolutions for your Business to establish targets. This was to assist in finding what outcome we want to achieve. This week aims to follow on from the resolutions to assist in turning them into goals. 

As a trained Physiotherapist, Sophie spends a lot of time in her health role, setting goals with patients to establish a treatment plan whether they come in due to injury or just to better themselves. In the financial setting, we can always better our situation but we need to know what that means for us. 

When setting a goal, it is important to be SMART – Specific, Measurable, Attainable, Relevant and Timely. We must ensure the goal we set is specific to what we want to achieve. We must have a measure to know whether or not we have reached our goal. We must set something that is attainable, to prevent us giving up from the start. We must choose a relevant goal to enable us to focus. We must set a clear time-frame to prevent procrastination. 

The first resolution we set can easily be turned into a SMART goal. ‘We will achieve a net profit of $52,000 for January to December 2021.’ The specificity is Profit, the measure is $52,000, the attainability is hard to determine (as we don’t know the business situation), it is relevant to building a thriving business and the timeline is set for 12 months. It is important to set the target higher but not so high that it is not achievable as this will assist you to work hard to achieve it. 

The next step is to break this into manageable chunks. If you find these smaller steps are too difficult or easy, you will want to re-assess your goal. Breaking the goal down looks like:  
– Quarterly Target: $13,000 net Profit 
– Monthly Target: $4,500 net Profit 
– Weekly Target: $1,000 net Profit

5 simple tips to help you stay on track to achieve your goals: 

1. Be precise when setting timeframes and amounts – this will help determine whether you have achieved your goal

2. Set priorities and choose a main goal to focus on – this ensures you and your team are focussed on the same target

3. Write your goal down and put it somewhere you see it everyday – this helps to maintain your motivation to achieve your goal and reconfirm it every day 

4. Tell someone or the world (via facebook) as this puts your intention out and makes you more accountable to achieving it

5. Break it down – this will make it less daunting and give you steps to achieving it

We hope you have a wonderful time goal setting and if you have any questions or want assistance please contact Sophie or Graham to book in a time.

New Years Resolutions for your Business

Happy New Year to all our amazing clients and friends! As with every new year comes new resolutions so have you set some New Years resolutions for your business to achieve this year? 

The new year is a great time to reflect, set goals and make a plan to achieve them. Below are a few tips and tricks on some example resolutions and how to set yourself up to start with goal setting. 

2021 Resolution List 

  • Achieve a Profit of $— this calendar year
  • Do a business health check 
  • Redo your business plan 
  • Work on the business (rather than in it) one day per month 

Why do we set goals? 

Without setting goals, we are flying blind, we don’t know what we are targeting and we lose motivation quickly. We have found in the past year with clear defined goals we are achieving a better business result as we have a target and work harder to get there. These goals give us motivation and drive as we know what we are trying to achieve. 

Where do we start? 

We would recommend starting out with a quick financial health check of your business. To begin with, look at your profit and loss for the last 2 years, break it down quarterly, monthly and weekly. Some questions to ask yourself?

  • How often are you achieving a profit vs a loss? 
  • What expenses are higher than you anticipated? 
  • Is there a consistent trend in your profit or is it all over the place? 

This will help you see where you are at and start thinking about where you want to be. Whilst you are looking at this, it is also worth looking into what processes are currently in place and how can they be more streamlined, no process is ever 100% efficient, so there are always improvements that can be made, even if minor. 

If you need help with a business health check or setting financial goals for your business, please contact Graham or Sophie to schedule a time. 

We wish you all the best for 2021! 

Jobkeeper 2.0

What is the Scheme?

Jobkeeper 2.0 is a 2-tiered system that will run from 28 September 2020 to 28 March 2021. Someone eligible for the first three months of Jobkeeper 2.0 (October to December) may not be eligible for the second three months of Jobkeeper 2.0 (January to March). Unlike the initial Jobkeeper Scheme, the criteria is based on actual turnover for each quarter, rather than projected turnover.

Eligibility Criteria:

Extension 1 (covers October to December 2020): Decline in ACTUAL turnover of 30% for businesses for the September Quarter 2020 compared to the September Quarter 2019.

Extension 2 (covers January to March 2021): Decline in ACTUAL turnover of 30% for businesses for the December Quarter 2020 compared to the December Quarter 2019.

Eligible Employees:

Employment date of July 1 2020 for Full-time or Permanent Part-time or 1 July 2019 for casuals. This has been amended from 1 March 2020 in the original Scheme.

Payment Rates:

Extension 1: If an employee or business participant worked under 20 hours on average per week prior to 1 July 2020 they are eligible for $750 per fortnight. If an employee or business participant worked over 20 hours on average per week prior to 1 July 2020 they are eligible for $1,200 per fortnight.

Extension 2: If an employee or business participant worked under 20 hours on average per week prior to 1 July 2020 they are eligible for $650. If an employee or business participant worked over 20 hours on average per week prior to 1 July 2020 they are eligible for $1,000 per fortnight.

Stopping JobKeeper for clients ineligible for Jobkeeper 2.0

If you are currently eligible for the JobKeeper Payment Scheme but will no longer be eligible, there is no need to worry. After reporting the September Turnover, we simply stop reporting and will no longer receive the payment after October.

If you have any questions or queries regarding any of this information, please get in contact with us.

Tax Table Update: make sure your payroll software is up to date

As you may be aware, the Australian Government has announced that Personal Income Tax Rate changes that were due to apply from 1 July 2022 have been brought forward to July 1 2020. This means that the changes applied have been backdated to 1 July 2020. This change was made when the Federal Budget Tax Bill was passed through both houses of parliament on the 9th October 2020.

What does this mean for employers?
For employers with staff members this means that there are new tax tables which will need to take effect from the 16th November 2020 at the latest. Those of you with online payroll systems may have noticed that the net pay of your employees has increased and the PAYG-W component has decreased. You do not need to worry about going back and adjusting previous wages to pay the gap, employees will be able to claim their previous PAYG-W at tax time when they complete their tax assessment for 2021.

The New Tax Table highlighting the new thresholds is below:

Taxable IncomeTax on this Income
$0 – $18,200Nil
$18,201 – $45,00019c for each $1 over $18,000
$45,001 – $120,000$5,092 + 32.5c per $1 over $45,000
$120,001 – $180,000$29,467 + 37c per $1 over $120,000
Over $180,000$51,667 + 45c per $1 over $180,000

The ATO’s tax calculators and tax tables have been adjusted to reflect the following changes and can be accessed here

They have also announced that the low and middle income tax offset will continue to be available for the 2020-2021 financial years but this will no longer apply after 30 June 2020.

What Steps do you need to take?

  1. If you have already processed pay runs since the introduction of the new tax tables on October 13 2020, DO NOT go back and change these. You have until the 16th November 2020 to implement the new tax tables
  2. You DO NOT need to adjust tax in future pays to make up for the ‘overpaid’ tax earlier in the year. Employees will be able to claim this back when completing their Year End Tax
  3. Your Cloud Accounting/Payroll Software provider should automatically update their system to include the new tax tables for pay runs after the 13th October and before the 16th November
  4. If you have a Desktop Software, you will be required to put in a tax patch or upgrade the software in order to install the new rates
  5. Review the direct debits you may have set-up for employees to match the new net pays on their wages

If you have any questions about the new tax tables or want assistance with any of the steps outlined, please contact us.

Covid-19 Grants

The COVID-19 Small Business Grant deadline is coming to a close with final applications due by June 1 2020.

The below information touches on the COVID-19 Grant eligibility criteria, documents required to prove eligibility and how to apply for the grant. We have also had a few clients receive an email fromService NSW regarding this grant so read below if you have also received one.

Small Business COVID-19 Support Grant

This is a $10,000 grant for Small Businesses open for application until June 1 2020. Applicants will likely be subject to an audit by the NSW Government or its representatives in the future, so check the criteria to determine your eligibility closely. Service NSW may ask for a combination of documents to support eligibility such as a letter from an accountant, prior BAS Statements, income tax declarations, bank statements for relevant periods and other documents where required.

Eligibility Criteria:

  • Have between 1-19 employees
  • Annual turnover of more than $75,000
  • Have total Australian wages below the NSW payroll tax threshold of $900,000
  • Have an ABN as of March 1 2020
  • Based in NSW and employ staff at March 1 2020
  • Highly impacted by the NSW COVID-19 Restrictions on Gatherings Order in issue on 30 March 2020
  • Decline in turnover of over 75% over a two-week period compared to the same two weeks last year
  • Have unavoidable business costs not otherwise the subject of other NSW and Commonwealth Government Financial Assistance measures
  • Industries: accommodation & food services, administrative & support services, arts & recreation services, information, media & telecommunications, manufacturing, other services (Brothel, Hairdresser, Beautician, Laundry & Dry-cleaning services), retail, transport, rental, hiring & real estate, education & training and wholesale trade
  • Sole traders are not eligible for this grant


For more information on this grant, click here.

How to apply:
The easiest way to apply is online, through Service NSW on the link here.

If you meet all the criteria excluding the industry criteria, it is worth giving Service NSW a call on 13 77 88 to discuss your eligibility for this grant. Note that if you are a Sole Trader, you will be ineligible for this grant.

Email from Service NSW
A few of our clients have received an email from service NSW along the lines of ‘Thank you for submitting your application for the small business COVID-19 support grant. We have had a high number of applications and are working through them as quickly as possible – it may take up to 10 business days from the date of this email to assess your application and notify you of an outcome. We apologise for the delay’.

We have talked to Service NSW as most of these clients have not applied for the COVID-19 support Grant. From this conversation, we have been told that this email was a bulk email to most parties who applied for both the COVID-19 Grant and the Bushfire Grant. This is due to the delay in processing applications through both Service NSW and the NSW Treasury. Service NSW sent out a bulk email to reduce phone traffic checking on where the processing is up to for either of these grants.

Jobkeeper Update

If you were eligible for Jobkeeper from the first fortnight you will notice that payments have started to arrive in your bank accounts.

We thought this would be a good opportunity to explain how to record these payments, when each fortnightly payment is due, other key dates and steps required going forward.

The ATO have put out documents detailing the processes required with recording the Jobkeeper Payment Scheme. They have specifically requested for the payments to be recorded in an income account called ‘Jobkeeper Subsidy’. This means that you will need to set up a new income account in the chart of accounts, that is under the income category and if you are GST registered, this is BAS excluded.

The fortnightly payments to employees are due within certain timeframes to ensure compliance with the ATO. Below are the payment due dates for each fortnight:

Fortnight 1, 2 and 3 payments had to be made to employees by 10th May to be eligible for these fortnights, so if they haven’t been paid, your employees will be ineligible for the first 3 fortnights.
Fortnight 4: 24th May 2020
Fortnight 5: 7th June 2020
Fortnight 6: 21st June 2020
Fortnight 7: 5th July 2020
Fortnight 8: 19th July 2020
Fortnight 9: 2nd August 2020
Fortnight 10: 16th August 2020
Fortnight 11: 30th August 2020
Fortnight 12: 13th September 2020
Fortnight 13: 27th September 2020

The other key dates to note are: 31st May – if you are an eligible participant intending to claim wages for April and May, you must enrol in Jobkeeper by the 31st of May14th of each month – once you have completed your monthly declaration each month, preferably between the 1st and 7th of the month, you will be expecting the Jobkeeper payment to be made into your account.Steps required going forward include the monthly declaration for all entities. This is required whether you are an eligible business participant or have employees.

If you have employees, you will be required to make the minimum $1500 gross payment (if tax free threshold is claimed this is equal to $1308 net) by the above dates. If you have employees, you are best to be STP compliant and include the relevant ATO codes as created by your software provider.

If you need help understanding the importance of these dates or creating the account to allocate Jobkeeper Payments, feel free to give us a call.

BEWARE OF THE SCAMS

The Australian Taxation Office (ATO) has advised that there is currently a JobKeeper Payment phone scam. These scammers will pretend to be from the ATO and will ask you to input your bank details. Whilst the ATO does communicate via email and SMS they will never ask for a reply, especially not to ask for bank account details or tax file numbers. They have also advised they will never use hyperlinks in its messages.
 
The ATO DOES NOT need bank details for employees as they will pay the funds directly to employers to be processed as wages. Unfortunately due to the confusing and stressful nature of the COVID-19 pandemic, cybercriminals have taken the opportunity to scam individuals and the rates of hacking and fraud have increased over the last few weeks.
 
The ATO have said that their emails and SMS include messages such as: 

  • inviting you to enrol in JobKeeper (no hyperlinks)
  • updates on the status of the JobKeeper enrolment
  • messages to help eligible businesses to apply for JobKeeper Payments via the Business Portal
  • messages advising that applications are open for early release of superannuation
  • notifications regarding the outcome of the early release of super 

If you see anything where the ATO is asking you to reply by SMS or email or asking you to open a hyperlink and input your tax file number or bank details, DO NOT RESPOND and alert the ATO to the new scam.

Single Touch Payroll

‘Biggest change since the introduction of GST’ – Sam Allert CEO Reckon

The aim of this blog is to give new information in a short sweet format. Seeing as Single Touch Payroll is the new big thing, here are a few simple points.

What: Single Touch Payroll (STP) is a new government initiative, where businesses are required to report their pay run each time it is completed

Why: The government introduced STP to determine what super and tax was owed for employees of businesses

When: It was introduced July 1st 2018 for businesses with 20 employees or more. For businesses with under 20 employees, it was introduced from July 1st 2019. If the employees consist only of closely held family members, it will not become a requirement until July 1st 2020.

Where: Employers will need to switch to an online payroll software to lodge STP and in turn it will go to employees myGov accounts.

Repercussions: The ATO announced that there will be no repercussions on business with less than 20 employees until after September 30th 2019.

Do you or anyone you know need help with Single Touch Payroll?

Feel free to contact us for a consult to discuss your needs!