The new financial year brings new changes to how tax is implemented in Australia. We’ve highlighted below key updates to tax for the 2023/24 financial year that may affect you or your business.
Employers & Business
· The superannuation guarantee has increased from 10.5% to 11%.
· Increases in the federal and state minimum wages come into effect.
· The Temporary Skilled Migration Income Threshold, which specifies the minimum wage that must be paid to a sponsored employee, was raised from $53,900 to $70,000.
· The 48-hour limit on work time per fortnight for those with student visas has been reinstated.
· The maximum amount that can be recovered by employees for underpaid labour entitlements through the small claims court processes rises from $20,000 to $100,000.
· If your small business meets the requirements, the Energy Bill Relief Fund for small businesses kicks in and applies to your energy costs.
· The ATO now accepts sharing economy reporting from platforms with electronic distribution.
· An increase in the superannuation guarantee to 11%
· The general transfer balance maximum rises to $1.9 million due to indexation.
· Default rates for super income streams’ minimum pension amounts.
· For all funds, reporting on SMSF transfer balance events switches from annual to quarterly.
For you and your family
· Make sure you keep track of the times you work from home using the new 67-cent fixed rate technique for deductions. The ATO won’t accept a straightforward computation of “I work from home every Wednesday” x 8 hours.
· The first home loan guarantee is now available to “friends, siblings, and other family members.”
· For 2022–2023, Medicare’s low-income cut-off has been raised.
· Starting on July 10, 2023, families with household incomes under $530,000 will be eligible for a higher childcare subsidy. For information, see the Services Australia website.
· The right to up to 20 weeks of paid parental leave for new parents.
· The eligibility age for the age pension was raised to 67.
Important: 1 July 2023 wage increases
For employers, calculating pay wrongly is not seen as an error; rather, it is seen as “wage theft.” The Fair Work Commission backs it up with fines of $9,390 per breach for a corporation, in addition to the reputational consequences of doing it wrong. The Fair Work Ombudsman recovered $532 million in unpaid pay for more than 384,000 workers in 2021–2022 alone.
On 1 July 2023, award rates of pay and the National Minimum Wage increased by 5.75%.
It is crucial that all firms check their payroll processes to make sure the right rates and Awards are being applied.
Workers who are not protected by an award or registered agreement must be paid the National Minimum Wage. The National Minimum Wage has increased to $23.23 per hour as of July 1, 2023 ($882.80 per week for a full-time worker working a typical 38-hour work week).
The minimum hourly wage for casual workers is $29.04, including the 25% casual loading.
Adult minimum award wages will increase by 5.75% starting with the first full pay period on or after July 1, 2023, for workers covered by an award. Junior employees, apprentices, and subsidised wages all receive proportionate raises.
In addition, the superannuation guarantee increased from 10.5% to 11% on 1 July 2023.
The employee’s take-home pay may be decreased by 0.5% if the employment contract with you stipulates that they are paid on a “total remuneration” basis (base + SG and any other allowances). In other words, a larger portion of their overall compensation will go towards their superannuation fund. Employees who receive a rate plus superannuation will continue to receive the same take-home pay, and the 0.5% rise will also be added to their SG payments.
If you’d like help with your individual or business tax returns this financial year, get in touch with the team at MB Accounting and Business Services. Our expert accountants are based in Ormeau and can help you to set up your business for success when it comes to business tax.