From 1 July 2021, the national minimum wage will increase to:
- $772.60 per week
- $20.33 per hour
This will result in the minimum rates for Modern Awards being increased. Due to the continued impacts of COVID-19, some of these increases will be delayed until November.
Please note that this increase is effective for the General Retail Industry Award from 1 July 2021.
Please be in touch if you need help working out how your pays will be affected.
You might also have seen that the NSW Government announced business support grants overnight due to this most recent lockdown. They aren’t open for applications just yet, but we will send through a more detailed newsletter as soon as they are.
What we know so far:
The grants will be divided into two streams:
- Small Business COVID-19 Support Grant. Available to businesses and sole traders with a turnover of more than $75,000 per annum but below the NSW government 2020–21 payroll tax threshold of $1,200,000 as at 1 July 2020.
- Hospitality and Tourism COVID-19 Support Grant. Available to tourism or hospitality businesses that have a turnover of more than $75,000 and an annual Australian wages bill of below $10 million, as at 1 July 2020.
Businesses will be able to apply for the grants through Service NSW from later in July and will need to show a decline in turnover across a minimum two-week period after the commencement of major restrictions on 26 June. Further details about eligibility should be available in the coming days.
You probably already know that the superannuation guarantee is being raised from 9.5 per cent to 10 per cent from 1 July 2021.
This increase will impact employees differently, depending on their contracts.
For employees whose superannuation is bundled into their total renumeration, have a conversation about why they may now receive less take-home pay in order to avoid any surprises next month.
It’s also a good time to prepare for the superannuation guarantee to go up 0.5 per cent annually until it reaches 12 per cent in 2025. This will need to factor into your decisions when hiring and renegotiating contracts.
As always, we are more than happy to discuss further, answer any questions you have and help you work out a plan for the next few years.
Let’s be honest, we have all been guilty of leaving our tax
planning to the last minute. But this year, tax advisers are getting in early with
a warning for small businesses to act now. Due to the economic uncertainty of
the 2020-2021 financial year, Small and Medium Enterprises (SME) should be
motivated to review tax planning strategies now, rather than leaving it to the
Following a year of disturbances, small business owners and individuals should
be trying to maximise their returns and recoup any losses from the past year’s
downturn. We would love you to have a chat about the following points with your
tax agent to see which may benefit you and how to go about applying them.
Key Areas of attention:
- Super Guarantee (SG): SG contributions must be paid by 30 June 2021 to qualify for a tax deduction in the 2020-2021 Financial Year. The Superannuation fund must receive the payment by 30 June 2021. As it can take over a week for the payment to be submitted through to the superfund, it would be advisable to pay this by mid-June where possible.
- Temporary Full Expensing (Instant Asset Write-Off): Policies have been expanded again in the last two federal budgets as part of the government’s Covid-19 initiative to encourage business spending to improve cash-flow. There is no limit to the amount a small business can write-off under this concession and unlike larger businesses, small businesses with an aggregated turnover of less than $50 million receive a full write-off for second-hand assets. The claim timeline has been extended to June 2023 in the Federal Budget but there are still time advantages to claiming in the 2020-21 Financial Year
- Loss Carry-back: Introduced in the October 2020 federal budget and extended for 12 months longer in the May 2021 budget, this allows companies to “carry-back” tax losses incurred in the 2019-20, 2020-21, 2021-22 & 2022-23 income years to an earlier year as far back as 2018-2019. A refund could be claimed on lodgement of tax returns from the 2020-21 year onwards, representing the tax savings that would have arisen if the tax loss had been available to claim earlier in the year.
- Small Business CGT Concessions: Those operating a small business may be eligible for these concessions on the sale of business assets or sale of shares in a company carrying on business. The concessions may be available where the aggregated turnover is less than $2 million or total net assets (excluding the Family Home & Superfund Balance) less than $6 million, although eligibility rules are extremely strict, having been tightened significantly in recent years
- Income Deferral: Businesses may wish to delay tax payments on assessable income this financial year by deferring invoices until after 30 June 2021. Income from payments won’t be taxed until the following financial year.
It is important to be aware that by using any available tax strategies now, both individuals and businesses will set the tone for the following financial year. Once you get into the habit of being fully across your tax administration and what needs to happen, it becomes much easier and more efficient to manage. Tax legislation is constantly changing and having one’s tax planning up-to-date can ensure that changes are used effectively.
As we come to the end of the financial year, there are lots
of different jobs we need to get done. All of these have due dates so we
thought we would put together a time-line to help you keep on track.
30 June 2021:
To receive a tax deduction in the 2020-21 Financial Year for wages and employee
superannuation, these must be processed and paid by June 30. Payments must be
received by 30 June so we recommend superannuation is paid mid-June to ensure
it gets to the superfund on time
1 July 2021:
Superannuation Guarantee is increasing to 10% as of 1 July 2021, so please consider your employment contracts which may need to be altered.
14 July 2021:
Single Touch Payroll (STP) Finalisation is due by the 14 July for large employers of 19 employees or more. Let your employees know that that they will not be receiving their physical payment summary but rather can access their information on MyGov.
31 July 2021:
STP Payroll Finalisation is due by the 31st of July for small employers of less than 19 employees. Let your employees know that that they will not be receiving their physical payment summary but rather can access their information on MyGov.
April – June 2021 Business Activity Statement (BAS) is due for lodgement so please ensure you are providing us your BAS documents prior to the 25 August 2021.
28 August 2021:
Taxable Payment Annual Report (TPAR) is due – this is industry specific to the Cleaning, Building & Construction, Courier & IT industry – to report on all subcontractors working for you.