Sky Update – May 2021
Budgets, Budgets, Budgets
On Tuesday the 11th of May, Treasurer Josh Frydenberg handed down the 2021-22 Federal Budget.
Some of the more notable inclusions are:
- Extension of temporary full expensing for asset purchases and company loss-carry back for 12 months;
- Tax and investment incentives for the digital economy;
- Extension of the low and middle income tax offset for 12 months;
- Child care subsidy increase for families with multiple children;
- $17.7 billion over 5 years to reform aged care;
- $2.3 billion on mental health infrastructure and programs; and
- New and extended home ownership programs for first home owners and single parents.
For more details on the Federal Budget, please refer to our comprehensive budget guide.
Following on from the Federal Budget, the Victorian Treasurer Tim Pallas handed down the Victorian State Budget on the 20th of May.
Full coverage of the Victorian State Budget can be found here. The tax measures announced in the State Budget include:
- A “mental health & wellbeing levy” to be paid by businesses with national payrolls over $10m;
- A “windfall gains” tax of up to 50% to be applied to planning decisions to rezone land from 1 July 2022;
- A new “premium land transfer duty” for transactions over $2m from 1 July 2021;
- A temporary land transfer duty concessions for new residential property within the City of Melbourne local government area;
- A temporary increase in the eligibility threshold for the off-the-plan duty concession to $1m;
- Land Tax rate increases for landholdings exceeding $1.8m;
- An increase in the Land Tax threshold from $250,000 to $300,000; and
- A bring forward of the increased Payroll Tax threshold to $700,000 to 1 July 2021.
In other budget news, the Queensland budget will be handed down on the 15th of June with the New South Wales budget hot on its heels on the 22nd of June.
If you have any budget related questions, please get in touch.
Superannuation Changes From 1 July
We have previously reported a number of superannuation changes due to start on the 1st of July 2021. The following is a refresher on those changes to help keep them front of mind:
- An increase in the employee superannuation guarantee rate from 9.5% to 10.0%;
- An increase in the concessional contributions cap from $25,000 to $27,500;
- An increase in the non-concessional contributions cap from $100,000 to $110,000; and
- An increase in the transfer balance cap from $1.6m to $1.7m.
Employers in particular, are reminded to make sure that their payroll systems and processes are updated to ensure that the correct 10.0% rate for employee superannuation contributions is applied from the 1st of July.
If you have questions about how these changes affect you, please get in touch.
Also, with EOFY approaching we take this opportunity to raise awareness of the relatively new carry-forward concessional contributions rules. Under these rules, people with a total super balance of less than $500,000 can make use of any unused part of the concessional contributions caps in the last five years (starting 2018-19).
These rules create an opportunity to make contributions in excess of the standard concessional contributions cap without incurring excess contributions tax. This can be a great strategy to bolster your superannuation and also to access additional tax benefits.
If you would like more information on the carry-forward concessional contributions rules or to check the carry-forward amount that you have available, please get in touch.
EOFY 2020-21 – Income Statements
With EOFY fast approaching, businesses should be starting to get organised to complete Income Statements for their employees.
As some may recall, Income Statements replaced the old Payment Summaries as part of the move to the Single Touch Payroll (STP) system.
Under the STP system, employers are required to report details to the ATO for each pay period in the year. It is then necessary for employers to make a “finalisation declaration” through their STP software by the 14th of July.
This finalisation process is typically straight forward in the payroll software used by most businesses. We recommend that employers familiarise themselves with this process in the lead up to EOFY so that the usual checks and reconciliations can be completed and the finalisation declaration made by the 14th of July.
A feature of the STP system is that there is no longer a Payment Summary to be provided by the employer to their employees. Instead, the employees are required to access their Income Statements via their MyGov accounts or via their Tax Agent.
Whilst Income Statement details will be visible to employees prior to the finalisation declaration being submitted, they may be subject to change. For this reason, the ATO recommend that personal income tax returns be lodged only once the Income Statement appears in the system as finalised.
If you have any questions about Income Statements and STP requirements, please get in touch.
Employment Contract Tool
Did you know that there is an Employment Contract Tool available on the Business.gov.au website?
The tool is designed to assist small businesses in preparing employment contracts that have the necessary inclusions based on the applicable Award and meet the Fair Work requirements.
We recommend that professional employment contracts be used when employing staff. The contract documents the “rules of engagement” for the employment relationship and can be invaluable when questions or issues arise.
For businesses that don’t have the resources to have an employment lawyer prepare their employment contracts, this tool is a good no-cost alternative.
Quote of the Month
There are a lot of great quotes about living life to the fullest. They serve as great little motivators to make the most of our time, take risks and experience new things.
Our favourite of all of them comes from the American journalist and author, Hunter S. Thompson.
“Life should not be a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in broadside in a cloud of smoke, thoroughly used up, totally worn out, and loudly proclaiming “Wow! What a Ride!”
Whilst Thompson may not be the best role-model you could choose, his gusto was undeniable and we feel that he has really captured the sentiment.
Sky Accountants Ballarat
Phone: 1300 328 855
Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia
Postal Address: PO Box 2234, Bakery Hill, Victoria 3354
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Phone: 03 97444522
Office Address: 45 Hamilton Street, Gisborne, Victoria 3437, Australia
Postal Address: PO Box 270 Gisborne Victoria 3437