The superannuation guarantee is legislated to increase from 9.5 per cent to 12 per cent in 0.5 percentage point increments from 2021 through to 2025. This means the superannuation guarantee rate will increase to 10.5 per cent from 1 July 2022 and rise by 0.5 per cent per year thereafter until it reaches 12 per cent by 2025.

What is the Super Guarantee?

The Super Guarantee or SG for short, is the contribution an employer is required to make into a super fund on behalf of an employee. The current rate is 10% of an employee's base salary, with this rate currently set to continue until 1 July 2022, when it is due to increase to 10.5%.

Below are the past and present SG rates, as well as the currently legislated future changes to the rate from the Australian Government:

Financial Year

Super Guarantee Rate

1 July 2002 – 30 June 2013

9%

1 July 2013 – 30 June 2014

9.25%

1 July 2014 – 30 June 2021

9.5%

1 July 2021 – 30 June 2022

10%

1 July 2022 – 30 June 2023

10.5%

1 July 2023 – 30 June 2024

11%

1 July 2024 – 30 June 2025

11.5%

1 July 2025 – 30 June 2026 and onwards

12%

 

 

 

 

 

 


Who qualifies for the superannuation guarantee?

From 1 July 2022, your employer may need to contribute to your super regardless of how much you are paid per month. If you're under 18, you need to work more than 30 hours in a week to be eligible.

Your eligibility is determined when you are paid salary and wages, not when the income is earned. This means if you are paid on or after 1 July 2022, you will be paid super regardless of how much you have earned. This applies even if some of the pay period is before 1 July 2022.

This applies whether you work casual, part-time or full-time hours, and if you are a temporary resident. You may also be eligible if you are a contractor who is paid primarily for labour, even if you have an Australian business number (ABN).

If you would like any further information or assistance with complying with your super guarantee obligations please contact us on 1300 885 761.

Single Touch Payroll Phase 2

Single Touch Payroll (STP) reporting has been expanded. This expansion is known as STP Phase 2. If you have employees, you will need to start reporting extra information each time you run your payroll.

Some digital service providers (DSP) needed more time to update their products and have applied for deferrals, which cover their customers. This means that when you can start Phase 2 reporting depends on when your payroll product is ready. If you haven't already started Phase 2 reporting, make sure you ask your provider when their product will be ready if you don't already know.

As an employer, it's important that you're across the changes required, and you're getting ready to start Phase 2 reporting. This includes:

  • checking if you need to make changes to payroll pay codes/categories so they align with Phase 2 requirements
  • reviewing allowances you pay and how they need to be reported in Phase 2
  • understanding changes to salary sacrifice reporting
  • understanding how to assign an income type to each payment.

Amounts paid to closely held payees should now be reported through STP. There are concessional reporting options for closely held payees reporting which include:

  • reporting actual payments on or before the date of payment (along with your arm's length employees)
  • reporting actual payments quarterly
  • reporting a reasonable estimate quarterly.

If you need more time:

  • You can apply for more time past your DSP's deferral if you need more time to transition.
  • You'll be able to apply for a delayed transition from December 2021.
  • There won't be penalties for genuine mistakes for the first year of Phase 2 reporting until 31 December 2022. This includes employers who have already started Phase 2 reporting.

How to apply for a deferral

If you need more time, you can contact the ATO for a deferral by:

We can also request the deferral for you.

If you would like any further information or assistance in regards to Single Touch Payroll, please feel free to contact us on 1300 885 761.

1 July 2022 and superannuation contribution changes

Several key super changes which may impact your ability to contribute to your SMSF, are set to take effect from 1 July 2022. These changes create opportunities for all SMSF members, young and old, to grow their retirement savings.

What are the changes?

Originally announced in the 2021 Federal Budget, the following changes apply from 1 July 2022:

  • Individuals up to the age of 74, will no longer need to meet a work test to make voluntary, non-deductible, contribution
  • Individuals up to the age of 75, with a total super balance under $1.7 million, will have the opportunity to make large non-concessional contributions (possibly up to three years' worth) in a single year
  • The minimum age to make downsizer contributions will reduce to 60, allowing more individuals to use the proceeds from the sale of their home, to fund their retirement
  • The Superannuation Guarantee (SG) rate will increase to 10.5% p.a. for all and the $450 minimum income threshold for SG contributions, will be removed
  • Under the First Home Super Super Scheme (FHSSS) eligible individuals will have access to an extra $20,000 of voluntary contributions to fund a home deposit.

How can you benefit from these changes?

The Work Test

Currently, if you are aged 67 to 74, you can only make voluntary contributions to super if you have worked at least 40 hours over 30 consecutive days in the financial year, or you satisfy the recently retired test.  The work test must be met prior to contributing.

From 1 July 2022, this work test will only apply to you if you wish to claim a tax deduction for the voluntary contributions you make to your SMSF. If making personal deductible contributions, from 1 July 2022, you will be able to meet the work test at any time in the financial year.

This means that the work test will no longer apply to contributions you make under a salary sacrifice arrangement or for any personal contributions that you don't claim a tax deduction for, such as non- concessional contributions.

Non-concessional Contribution

Currently, only if you were under the age of 67 on 1 July of the financial year, can you make non-concessional contributions which exceed  the annual $110,000 non-concessional contributions cap. Currently, the bring-forward rules allow you to make up to $330,000 (i.e. three years' worth of non-concessional contributions), in a single year if your total super balances was under $1.48 million as at 30 June of the previous financial year, or $220,000 if your total super balances was greater than or equal to $1.48 million but less than $1.59 million as at 30 June of the previous financial year.

From 1 July 2022, the cut-off age to access the bring rules will increase to 75. However, the total super balance thresholds referred to apply above, still apply. 

This means that if you are 74 on 1 July 2022 and you have a total super balance of less than $1.48m, you may be able to have one last boost to your retirement savings by making a $330,000 non-concessional contribution to your SMSF. The contribution simply must be made, no later than 28 days after the month in which you turn 75.

Downsizer Contributions

Currently, you can only make a downsizer contribution if you are 65 or older at the time of the contribution and have satisfied the other eligibility requirements.

From 1 July 2022, the minimum age will reduce to 60. All other eligibility rules remain unchanged and the maximum amount of downsizer contributions that can be made remains at $300,000 per person or $600,000 per couple.

If you are selling your home and expect to receive the sale proceeds close to the end of this financial year, please contact our office to discuss the timing of a downsizer contribution and the potential to boost other contribution opportunities in 2022-23. For example, if you get the timing right, you may be able to combine a downsizer contribution with the bring forward rules to contribute up to $630,000 to your SMSF, in one year. As a couple this could present a one-off opportunity to boost your retirement savings by $1.26m.

First Home Super Saver Scheme (FHSSS)

Currently the FHSSS allows you to withdraw a maximum of $30,000 of voluntary contributions (plus associated earnings/less tax) from your super fund to fund the deposit of a new home.

From 1 July 2022, the maximum amount that can be withdrawn will increase to $50,000 meaning each eligible person will be able to withdraw an additional $20,000. All other eligibility rules remain unchanged.

Also unchanged is the maximum amount of contributions that an individual can make each year that can count towards the FHSSS – this remains at $15,000 p.a. This means that it will take a member, at least four years of voluntary contributions, to reach the higher $50,000 limit.

How can we help?

Navigating your way through the superannuation contribution rules can be very complex, especially in the lead up to a member's retirement. If you have any questions, require assistance, or would like to discuss whether any of these opportunities apply to you, please feel free to give us a call on 1300 885 761 to arrange a time to discuss.

Fuel tax credit rates have changed

You may be eligible to claim fuel tax credits for fuel purchased for use in your business. To be eligible you must:

  • Be registered for GST
  • Use the fuel for an eligible activity including but not limited to:
    • Use in heavy vehicles travelling on public roads if the vehicle has a gross vehicle mass (GVM) greater than 4.5 tonnes.
    • Use in business activities such as agriculture, forestry, mining, construction and manufacturing if the vehicle (including light vehicles) was travelling on private roads and off public roads.

Further details regarding eligible fuels and business activities can be found on the ATO website.

Indexation of rates:

The rates for fuel tax credits changed on 1 February and 30 March. The excise and excise equivalent customs duty rates have halved for petrol, diesel, and all other petroleum-based products except aviation fuels. This temporary reduction is in place for 6 months, and applies from 30 March until 28 September 2022.

The indexed rates for the period from 30 March 2022 to 30 June 2022 are as follows:

  • Reduce from 17.8 to nil for liquid fuels used in a heavy vehicle on public roads. In this 6-month period, businesses using fuel in heavy vehicles for travelling on public roads won't be able to claim fuel tax credits. This is because the road user charge exceeds the excise duty you'll pay, and this reduces the fuel tax credit rate to nil.
  • Reduce from 44.2 to 22.1 cents per litre for liquid fuels in all other business uses;
  • Reduce from 18.955 to 9.44 cents per litre for E85 (85% ethanol/15% petrol) in all business uses except heavy vehicles on public roads;
  • Reduce from 14.4 to 7.2 cents per litre for liquefied petroleum gas (LPG) ; and
  • Reduce from 30.3 to 15.2 cents per kilogram for compressed natural gas (CNG) and liquefied natural gas (LNG).

These changes will affect fuel tax credit calculations for March and June quarter Activity Statements.

If you claim less than $10,000 in fuel credits each year you can calculate your fuel tax credit using the rate that applies at the end of the BAS period.

The ATO fuel tax credit calculator can be found here.

Please contact us on 1300 885 761 for more information.  

2022 Tax planning

Tax planning is a useful tool used by many taxpayers to legally minimise their tax. A tax plan will also help you plan for upcoming tax payments that may be required.

Our annual tax planning service involves estimating your potential tax position for the financial year and looking at strategies you can implement prior to 30 June that may reduce your tax liability and enhance your financial position.

Once we have completed your tax estimates, we will generally meet with you to discuss the results and our proposed tax planning strategies.

Tax plans can be completed on an annual basis, or at any time of the year for specific events such as:  

  •  You are starting a new business and would like to know which trading structure would be the most tax effective for your situation;
  • Your situation has changed and you would like to know what options you have to change your structure; or
  • You have sold or are planning to sell an asset during the year and there may be capital gains tax implications. 

If you would like to know more contact us on 1300 885 761.

Have you completed your 2021 tax return?

If you haven't yet lodged your 2021 tax return, you are running out of time. We recommend you contact us immediately to avoid a last minute rush, and to avoid potential penalties and interest for late lodgement.

For most of our clients, the due date for lodgement of 2021 tax returns is 15 May 2022. However, there are some exceptions to this deadline, especially for business taxpayers.

We will be contacting clients who have yet to complete their returns to ensure everyone lodges on time.

If you are not aware of your lodgement requirements please contact us on 1300 885 761 to discuss.

2022/23 Federal Budget Highlights

On 29 March 2022 the Budget for 2022-23 was released. The measures announced as part of the 2022–23 Budget are subject to receiving royal assent and are not yet law.

There are a number of changes that may have an impact on your personal, business or superannuation situation. The key points are:

Individuals

1.       Low and middle income tax offset ('LMITO') to be increased by $420

The LMITO will include a cost of living tax offset in the 2021–22 income year. The cost of living tax offset is a flat $420 to be applied to all recipients of LMITO when they lodge their tax return.

The maximum offset proposed for the 2022 income year is $1,500 per annum. However, the amount you receive depends on your income and how much tax you've paid throughout the year. It doesn't mean that you will automatically get an extra $1,500 in your tax return.

2.       One-off payment to ease cost of living pressures

Individuals who are currently in receipt of an Australian government allowance or pension will receive a one-off payment of $250 in April 2022 to ease the cost of living pressures. Certain concession card holders will also get the payment.

The cost of living payment will be exempt from tax and will not count towards an individual's income for social security income test purposes.

Businesses

1.       Temporary full expensing

Maintained until 30 June 2023 and other elements of temporary full expensing will remain unchanged, including the alternative eligibility test based on total income, which will continue to be available to businesses.

2.       Increased deductions for digital adoption by small businesses

Small and medium businesses will be able to deduct an additional 20% of eligible expenditure supporting digital adoption.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. Eligible expenditure will include the cost of depreciating assets and business expenses supporting digital adoption, such as portable payment devices, cyber security systems or subscriptions to cloud-based services. An annual cap of $100,000 will apply to expenditure eligible for the additional deduction.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2023.

For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:

  • claim the expenditure as usual in your 2021–22 tax return, and
  • claim the additional 20% bonus deduction for this period in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2022 until 30 June 2023:

  • you can deduct the entire 120% in your 2022–23 tax return. 

3.       Increased deduction for small business external training expenditure

Small and medium businesses will be able to deduct an additional 20% of expenditure incurred on external training courses provided to their employees.

The additional deduction will apply for businesses with aggregated turnover of less than $50 million. The external training course must be delivered by an Australian entity and provided to employees in Australia or online. In-house or on-the-job training and expenditure for persons other than employees will be excluded.

The measure will apply for eligible expenditure incurred from 7:30pm (AEDT) on 29 March 2022 (Budget night) until 30 June 2024.

For eligible expenditure incurred between 7:30 pm AEDT 29 March 2022 until 30 June 2022:

  • claim the expenditure as usual in your 2021–22 tax return, and
  • claim the additional 20% bonus deduction for this period in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2022 until 30 June 2023:

  • you can deduct the entire 120% in your 2022–23 tax return.

For eligible expenditure incurred from 1 July 2023 until 30 June 2024:

  • you can deduct the entire 120% in your 2023–24 tax return. 

4.       Apprenticeship wage subsidy extended

The Boosting Apprenticeship Commencements wage subsidy will be extended to support businesses and Group Training Organisations that take on new apprentices and trainees. The subsidy will now be available to 30 June 2022. This measure will provide for an additional 35,000 apprentices and trainees. Eligible businesses will be reimbursed up to 50% of an apprentice or trainee's wages of up to $7,000 per quarter for 12 months.

Superannuation

Extension of the temporary reduction in superannuation minimum draw down rates

The Government has extended the 50 per cent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products for a further year to 30 June 2023. The minimum drawdown requirements determine the minimum amount of a pension that a retiree has to draw from their superannuation in order to qualify for tax concessions.

Given ongoing volatility, this change will allow retirees to avoid selling assets in order to satisfy the minimum drawdown requirements.

Please feel free to contact us on 1300 885 761 if you have any questions or would like further information in regards to any of the above changes.

Reminder: To apply for Director IDs

A director ID is a new requirement for all company directors.  If you want to become a director or are already one, you'll need a director ID. When you need to apply depends on the date you become a director.

When you need to apply

You can apply for a director ID now.

If you became a director on or before 31 October 2021, you need to apply by 30 November 2022.

If you became/become a director- Between 1 November 2021 and 4 April 2022, you need to apply within 28 days of appointment.

If you become a director on or after 5 April 2022, you will need to apply before appointment.

How to apply

For most people, the quickest and easiest way is to apply online, by following these steps:-

Step 1Set up myGovID

If you don't have a myGovID, you can find information on how to download the app at How to set up myGovID

You will need a standard or strong identity strength myGovID to apply for your director ID online.

Step 2 – Gather your documents

You will need to have some information the ATO knows about you when you apply for your director ID:

  • your tax file number (TFN)
  • the residential address listed in your most recent income tax return
  • information from two documents to verify your identity.

Examples of the documents you can use to verify your identity include:

  • the bank account details on your most recent tax return
  • your latest ATO notice of assessment
  • your super account details
  • a recent dividend statement
  • a Centrelink payment summary
  • PAYG payment summary.

Step 3 – Complete your application

Once you have a standard or strong identity strength myGovID, and your documents, you can log in to ABRS (https://www.abrs.gov.au/) and apply for your director ID. The application process should take less than 5 minutes.

More information about Director ID can be found here.

As this process requires myGovID, we are unable to undertake the application for you. However, once you obtain your director ID please ensure you provide details to us that we can update the necessary company records.  In the meantime please contact us on 1300 885 761, if you would like any further information or assistance in regards to obtaining your Director ID.

2022 NSW Small Business Support Program

If you're a business, sole trader or not-for-profit organisation in NSW and you've been impacted by the Omicron wave of COVID-19, you may be eligible for a payment under the 2022 Small Business Support Program.

Eligible businesses will receive one payment covering the 4-week period of February 2022. Businesses will not receive payment for January 2022. The payment equivalent of 20 per cent of weekly payroll for work performed in NSW:

  • the minimum payment will be $750 per week, and
  • the maximum payment will be $5,000 per week.

Eligible non-employing businesses will receive $500 per week.

Applications opened on 16 February 2022 and close at 11:59pm on 31 March 2022.

Eligibility

To be eligible, a business must:

  • have an active Australian Business Number (ABN);
  • have been operating in NSW on 1 January 2021;
  • have had an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2021 or 30 June 2020;
  • have experienced a decline in turnover of 40% or more due to the impacts of COVID-19:
    • during January 2022, compared to January 2021 or January 2020
    • from 1 to 14 February 2022, compared to the same fortnight in February 2021 or February 2020;
  • for employing businesses, maintain your employee headcount from 30 January to 28 February 2022;
  • for non-employing businesses, such as sole traders, show that the business is the primary income source (50% or more of the total income) for the associated person. If you have more than one non-employing business, you can only claim payments for one business.

Alternative circumstances

If your business does not meet all the eligibility criteria, you may be able to apply for the 2022 Small Business Support Program if you can provide evidence to support the alternative circumstances outlined in the guidelines.

Evidence to support eligibility

  • submit your most recently lodged Australian income tax return, with tax file numbers redacted, demonstrating an aggregated annual turnover between $75,000 and $50 million (inclusive) for the year ended 30 June 2020 or 30 June 2021, or for registered charities, your ACNC Annual Information Statement;
  • provide evidence of how the weekly payroll amount was calculated, through:
    • your most recent BAS or IAS within the 2021–22 financial year,
    • your 2020-21 payroll tax reconciliation return, or
    • a copy of your business's payroll report filed using Single Touch Payroll (STP);
  • provide other supporting documents, which may include:
    • letter of authority, if you are not listed as an associate on the Australian Business Register,
    • a letter from your accountant, tax agent or BAS agent to verify your business's 40% decline in turnover during the month of January 2022,
    • audited profit and loss statements,
    • receipts and invoices from purchases,
    • NSW payroll tax reconciliation returns;
  • identify how the public health order has directly impacted the turnover of the business.

What you need

  • a MyServiceNSW Account – you can create one when you start your application
  • two proof of identity, they may include:
    • Australian driver licence
    • Medicare card
    • Australian passport
    • Australian birth certificate
    • Australian travel visa
    • Australian citizenship certificate
    • Australian certificate of registration by descent
    • Australian ImmiCard.
  • your valid ABN/ACN number
  • your business banking details for payment
  • evidence of your annual turnover and loss of income
  • Australian income tax return, or for registered charities, your ACNC Annual Information Statement
  • qualified accountant, registered tax agent or registered BAS agent details, where required.

If your application is approved, the funds will be transferred to your nominated bank account within 5 to 10 business days from the approval date.

How to apply

Details of Small Business Support Program can be accessed here.                                

The application can be lodged online through Service NSW website. Or if you are not able to apply online, you can call 13 77 88.

If you would like any further information or assistance with Small Business Support Program please contact us on 1300 885 761.

The NSW and Australian Governments have announced the availability of Special Disaster Grants (SDG) of up to $50,000 to support eligible primary producers impacted by the severe weather and flooding that has occurred in NSW during November and December 2021.

Funds of up to $50,000 per affected property are available. This includes $10,000 that can be provided up-front once you're approved. If claiming for an amount above $10,000, you will need to prove the expenditure of this amount with valid tax invoices. Then, any payment above the original $10,000 up to an additional $40,000 will be reimbursed upon supply of valid tax invoices for eligible expenses.

Eligibility criteria

You must:

  • be a primary producer;
  • draw at least 50% of your gross income from your primary production enterprise;
  • contribute a part of your labour to the primary production enterprise;
  • hold an Australian Business Number (ABN) and have held that ABN at the time of this event;
  • have a primary production enterprise located in the defined area that has suffered direct damage as a result of this event;
  • have been engaged in carrying on the primary production enterprise when affected by this event;
  • lodge an application by the closing date shown on the RAA website: see link;
  • intend to re-establish or continue the primary production enterprise.

Using your grant

You can use your grant to:

  • Help pay for the costs of clean up, reinstatement activities and emergency measures associated with the immediate recovery of your primary production enterprise. 
  • Hire or lease equipment or materials to clean premises, property or equipment.
  • Remove and dispose of debris, damaged goods or materials including injured or dead livestock.
  • Repair or replace fencing and/or other essential property infrastructure.
  • Purchase and transport fodder or feed for livestock.
  • Replace livestock.
  • Replace lost or damaged plants, salvage crops, repair or restore fields.
  • Repair, recondition or replace essential plant or equipment.
  • Maintain the health of livestock.
  • Pay additional wages to an employee to assist with clean-up work (above and beyond normal wage expenditure, ie. day-to-day staffing).
  • Repair buildings (except dwellings, unless they are used for staff accommodation).

How to apply and claim

  1. Application: You must apply for the Special Disaster Grant by submitting an application via the RAA website. If you are a new customer, you will be asked to provide supporting documentation, however if you have received RAA assistance previously, this may not be required. You will need to submit your application by the closing date shown on the RAA website.
  2. Assessment: Your application will be assessed and if all program eligibility criteria can be met, the application will be approved.
  3. Payment: Once your application has been approved, payment up to $10,000 will be made to your nominated bank account.
  4. Claim: If claiming for an amount above $10,000 you will need to prove the expenditure of this amount with valid tax invoices. Then, any payment above the original $10,000 up to $50,000 will be reimbursed upon the supply of valid tax invoices. Claims must be submitted by the closing date dhow on the RAA website.

What you will need to apply

Applicants must provide a complete application form and:

  • Local Land Services rates notice; and
  • Lease agreement if you are the lessee of the impacted property you are applying for; and
  • Latest farm business tax returns and financial statements plus Personal Tax Return of all members of the business; and
  • You may include other evidence such as quotes, estimates, photos or tax invoices.

Claim invoice payment

You will need:

  • BP reference number
  • ABN number
  • Case number from original application
  • Tax Invoices 

Details of Special Disaster Grants can be accessed here.                         

The application can be lodged online through RAA website.

If you would like any further information or assistance with the Grant please contact us on 1300 885 761.