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GEARING UP FOR 1 JULY | What you Need to Know!

Updated: 3 days ago

With the dawn of the new financial year comes a host of changes that small biz owners and employers need to be on top of. Ignorance is not bliss on this one! Starting from 1 July, brace yourselves for:

Superannuation Guarantee (SG) Increase

The SG rate is bumping up to 11.5%. Super guarantee is a critical component of an employee's wages, and it's vital that the correct rate is paid on time.

Why the fuss? Because if you miss the deadline, it's non-deductible, you'll have to lodge a superannuation guarantee statement, and there are hefty fines that cannot be remitted.

Heads Up? With data matching, employees, and retail super funds tipping off the taxman-ian devil, plus increased audit activity, no cowboy antics will be tolerated! You’ve been warned... Want to dive deeper? The taxman-ian devil has some surprisingly good resources. Check them out here.

Action: Ensure your payroll systems are up to date. If you use Xero payroll, this will be automatically updated for you.

⚡Superannuation Contribution Caps increasing⚡

The general concessional superannuation contributions cap is rising to $30,000, up from $27,500.

What is it? The concessional contributions cap is the maximum amount of before-tax super contributions you can make each year without extra tax.

Warning: Stay within the caps to avoid penalties. It’s crucial to engage with us to determine your maximum contributions each year (including super guarantee) and any unused carry forward super. More info can be found here.

Action: Get some tax planning to maximise the tax benefits of super, including timing and understanding your contribution limits. Engaging with a financial planner is also key here.

Recommendation: Wondering if you should contribute to super? Check out our blog covering all things super and its tax benefits here.

Minimum Award Increases

The FairWork Commission is upping minimum award wages by 3.75%.

When? This increase kicks in from the first full pay period starting on or after 1 July 2024. If your weekly pay period starts on Wednesday, the new rates apply from Wednesday 3 July 2024.

Warning: Payroll is high risk, and you need to get it right. Don't be a George Calombaris and plead ignorance—it won’t fly.

Action:  Update your payroll systems to include the increase from the first full pay period starting on or after 1 July 2024 to stay compliant.

Recommend: Refer to your industry award or connect with your industry body for support. And of course, we’re always here to help. If you have complex payrolls, consider using a third-party app like  Deputy, Employment Hero or Tanda for support—especially if they offer award interpretation. Feeling overwhelmed? Engage with us—we’re the payroll experts ready to support your biz. 😉 

⚡Tax Cuts⚡

Tax cuts are finally here after a few iterations—phew!

Why? Ever heard of 'bracket creep'? It's like a sneaky tax villain that nibbles away at your hard-earned cash. Well, the Government is suiting up to take this baddie down. By adjusting tax brackets, they're ensuring more of your money stays where it belongs - in your pocket! So, let's break this round of tax cuts into bite-sized chunks for you:

  1. Reducing the 19% tax bracket to 16% (this affects incomes between $18,200 to $45,000)

  2. Reducing the 32.5% tax bracket to 30% (this affects incomes between $45k to a new threshold of $135K - woohoo!)

  3. Minimum income level for the 37% tax bracket to increase from $120K to $135K up to $190K (as alluded to above - heck yeah!)

  4. Minimum income level for the 45% tax bracket will be increasing from $180k to $190k (Insert happy dance).

This increase will apply from the first full pay period starting on or after 1 July 2024. This means if your weekly pay period starts on Wednesday, the new rates will apply from Wednesday 3 July 2024.

Action: Make sure your payroll systems are updated to reflect this change. If you use Xero payroll, this will be automatically updated for you.

Recommend: Read our blog here for the finer deets.

⚡Bonuses for Employees⚡

This one isn’t a change—more a highlight in bright neon lights, as we see many employers incorrectly treat bonuses.

The taxman-ian devil (aka the ATO) treats bonuses like salary and wages (the ATO says, "gimme allllll of that TAX"). So, bonuses MUST be processed through your payroll system, with the net cash (gross less tax) paid to the employee. Want to know how to process a bonus in Xero? They’ve got a great article on it—check it out here.

Recommend: Read our blog here for more info.

Well, that's it for now, folks. Happy New Financial Year—may it be a goodie!

As always, if you have any questions about the above, feel free to reach out to one of our oh-so-cool, not-nerdy-at-all team members today.

Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.

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