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Training your staff can get you a 20% bonus deduction

The Skills and Training Boost has been reignited, bringing a 20% bonus tax deduction for external training costs for staff. The bonus deduction is designed to assist you in training and upskilling your employees.

It is available for expenses you incur between 29 March 2022 and 30 June 2024. If you have incurred eligible staff training expenses before 30 June 2022, you will need to wait until your 2022-23 tax return to claim.

To qualify for the bonus deduction, you will need to engage an external training organisation that is registered in Australia to complete the training. The additional deduction is not available for on-the-job or in-house training costs.

Also, the bonus deduction is available for your employees only. Therefore, if you are a sole trader or partner in a partnership, you can only make a tax deduction claim under self-education in your individual return. Your associates and independent contractors are specifically excluded from the bonus deduction.

Training a new employee who requires upskilling for their new role, for example, would be eligible for the bonus deduction.

This measure was originally announced by the former government in the 2022 Federal Budget. It is expected that it will pass through the parliamentary process and become law.

If you have any questions, please contact our office. We would be delighted to assist you further.

20% bonus deduction available for technology investment

A bonus deduction is available for your business for expenses you incur in becoming a digital business. As your business has an aggregated turnover of less than $50 million, you are eligible for the deduction.

The bonus deduction will be 20% of the cost incurred for business expenses or depreciable assets that support a digital adoption, including but not limited to:

• Digital enabling items such as computer hardware and software, and systems and services that form and facilitate the use of a computer network
• Digital media and marketing such as audio and visual content that can be created, accessed, stored and viewed on digital services, and
• e-commerce items that support digital payment systems and online transactions.

An annual bonus deduction of $20,000 will apply in each qualifying income year so that expenditure up to $100,000 will be eligible for the bonus deduction. As the bonus deduction is available in 2 financial years, an overall maximum bonus deduciton of $40,000 is available.

Any eligible costs incurred from 7:30pm (AEDT) on 29 March 2022 to 30 June 2023 are included. However, expenditure incurred in the 2021-22 income year will only get the bonus deduction when you lodge your 2022-23 income tax return.

If you have purchased a depreciating asset for the digital adoption, this asset must be first used, or installed ready for use, before 1 July 2023 to qualify for the bonus deduction.

This measure was originally announced by the former government in the 2022 Federal Budget. It is expected that it will pass through the parliamentary process and become law.

If you have any questions, please contact our office. We would be delighted to assist you further.

Changes to Annualised Salaries in Restaurant and Hospitality Awards

Annualised salary arrangements in restaurant and hospitality awards are changing in September 2022.

After a review of the annualised arrangements in these awards, the Fair Work Commission has introduced changes that will make payments for salaried workers fairer.

Employers have been able to pay 25% on top of the base wage to allow for overtime and penalties. This meant they could do an annual reconciliation of actual hours worked to ensure the salary covered the overtime and penalties there were entitled to had they been paid by the hour. Any shortfall in wages could be paid with a single top-up payment each year.

The new arrangements bring in weekly outer limits to overtime and penalty hours. Employees who work more than 18 hours on weekends and public holidays within a week will need to be paid the hourly or penalty rate in addition to the regular wage.

If you’re paying staff an annual salary, the new rules mean you will need to review hours each week to check staff are not working more than the prescribed outer limits for extra hours. If they are, you will need to calculate the amount owing and pay it each week.

While an annual reconciliation of hours worked against the wages paid is still required, you can no longer wait until the end of the year to calculate and pay any shortfall.

The new system should make it fairer for salaried employees who will receive payment in the week that extra hours over the limits were worked. It should also assist with your business’s cash flow, as you’ll be paying wages during busy times, and the annual top-up payment should be smaller.

Review Your Annualised Salary Agreements

If you’re paying staff a salary, there are certain obligations you have to meet. We can help get systems in place to manage your employer obligations and make it as easy as possible to track time and perform the annual reconciliations of hours against wages paid. Book a time to talk to us about the new provisions for restaurant and hospitality workers and how to implement them in your business.

Payroll Updates Sept 2022: Minimum Wage, Super Increase and STP

Minimum Wage Increased on 1 July 2022

The national minimum wage increased on 1 July by 5.2% to $21.38 per hour (or $812.60 per week).

The minimum wage increase applies to employees if an award or national minimum wage defines their pay rate.

This year, the Fair Work Ombudsman (FWO) has once again implemented minimum wage increases to awards in a staggered approach. Most awards increased on 1 July; however, some will increase on 1 October.

For full details of October award increases, visit Fair Work Ombudsman October 2022 minimum wage increase. The main industries changing in October are Aviation, Hospitality and Tourism.

Tax Table Updates

While most tax tables remain the same for the 2022-23 financial year, the annual indexing of the study and training support loans have been applied.

Check the study and training support loans and working holiday makers tax tables for current withholding rates.

If you use online payroll software, the updates will be taken care of already. But if you process payroll manually, you’ll need to factor in the new rates for these tax types.

Superannuation Increase from 1 July 2022

The superannuation guarantee statutory rate increased to 10.5% on 1 July. Your payroll software should automatically update the rate, but check that the rate has updated, just in case you have manually entered the rate for some employees or payroll categories.

Review any agreements or annualised salary arrangements you have with employees that may be inclusive of superannuation.

Also, remember that the monthly $450 threshold has been removed, meaning that you must pay superannuation for all earnings. If you have a large casual workforce, this could impact your costs significantly.

Your first quarterly superannuation payment at the new rate will be due in October 2022.

Unpaid Pandemic Leave Reinstated for Some

During the COVID-19 pandemic, Schedule X was added to most awards to allow for two weeks of unpaid pandemic leave. The schedule expired in June 2022 but has been reinstated for some awards:

• Aged Care
• Ambulance and patient Transport
• Aboriginal and Torres Strait Islander Health Services
• Health Professionals and Support Services
• Supported Employment Services
• Social, Community, Home Care and Disability Services

Employees who no longer have unpaid pandemic leave available in their awards can take personal leave if unwell or use annual leave if they need to isolate themselves but are otherwise well enough to work. They can also use carer’s leave if they need to look after unwell family members.

Review Your Payroll

Now is an excellent time to assess your payroll systems in readiness for the busy summer season ahead. We can help check your payroll setup, award provisions, employee agreements and payroll costing. There are many details to take care of when engaging workers, and we can also advise on the software you are using and make sure it meets the ATO’s Single Touch Payroll reporting requirements – due for all employers by 31 December.

Have You Got Your .au Domain Name?

Earlier this year, .au domain names were released for Australian websites and email addresses. This gives you the option of using a shorter and simpler domain name.

For existing business domain name holders, you have until 20 September to get the .au version of your domain name. However, you still have to buy it from a domain name provider and prove that you are eligible to own the .au version of the domain name. If there are no conflicting applications for the name, you can register the direct match of your existing domain name.

After 20 September, .au versions of domain names become open to the public. Unlike .com.au and .org.au namespaces, the .au namespace does not have specific allocation criteria based on an Australian Business Number. This means anyone can buy the .au namespace.

Essential for Business Websites

If you have any online presence linked to a business, it’s essential that you apply for the matching .au domain name before 20 September. Especially if you conduct an online business, you’ll want to own the .au equivalent of your domain to avoid confusion and competition.

In some cases, multiple parties may be eligible to own the same .au domain name. In this case, the priority allocation of the domain name will be given to whichever party registered first.

Check the status of your domain with the .auda Priority Status Tool. And talk to your domain name provider now about registering your .au domain name.

Need Help?

Talk to us if you’re not sure where to start with getting your .au domain name or if you want to understand more about whether it will benefit you. We can also connect you with specialists who can link the new domain name with your existing business to make the most of your online presence.

ATO to have power to make you take tax education course

Legislation introduced into parliament will give the Australian Taxation Office (ATO) the ability to direct you to undertake a tax education course in lieu of an administrative penalty for infringements such as late lodgment or insufficient tax records.

The ATO will use this option in their compliance activity if they believe that you:

• have failed to comply with your record-keeping obligations, and
• are not disengaged or deliberately avoiding your tax obligations.

The alternative option will initially be given to small businesses. If you are running a company, you may need to name an individual who will take the course on behalf of the company.

It is expected that the course will be free, take approximately 2 hours to complete, and be delivered in an online platform.

If you receive an education direction, you will be required to complete the course within the time period specified by the ATO. Once you complete the course, you will be required to provide that information to the ATO.

The best way to avoid the education direction is to ensure that your tax records are up to date and that you comply with tax substantiation requirements.

Please let us know if you need more information about this with regards to your tax situation.