Australian small businesses are in for a flurry of adjustments come July 1st, 2024. From tax updates and minimum wage increases to superannuation bumps and Single Touch Payroll finalisation, here’s a breakdown of key changes to navigate:
Income Tax Cuts and Payroll Updates
From 1 July, the Australian Government will implement changes to income tax rates and thresholds, delivering tax cuts to workers. Small business employers must ensure they have the updated tax tables from the Australian Taxation Office (ATO) and that their payroll software is up-to-date to withhold the correct amount of tax. “Employers are responsible for getting this right,” Billson emphasized.
Minimum Wage and Award Rate Adjustments
The National Minimum Wage will increase by 3.75% to $915.90 per week, or $24.10 per hour. Additionally, minimum award wages will also rise by 3.75%, effective from the first full pay period starting on or after 1 July. Business owners can access more information and tools from the Fair Work Ombudsman.
Super Guarantee Rate Increase
The Super Guarantee (SG) rate will rise from 11% to 11.5%. Employers must use the new rate to calculate superannuation payments for employees on or after 1 July, even if part of the pay period covers work done before this date. The SG rate is legislated to increase to 12% by 2025. The ATO advises that timely super payments are crucial, as late contributions may incur penalties.
Single Touch Payroll Finalization
Employers are required to finalize employees’ Single Touch Payroll (STP) data by 14 July. This obligation ensures employees have the correct information needed to lodge their income tax returns. All employees paid during the 2023-24 financial year, including those no longer on staff, must be included.
Instant Asset Write-Off and Tax Deductions
The instant asset write-off threshold for eligible small businesses with a turnover up to $10 million will be set at $20,000 per asset for the 2024-25 financial year. Businesses should also check with the ATO for any deductible expenses needed before 30 June. “The end of the financial year is a good time to not just have a stocktake but to take stock of the health of your business and yourself,” Billson advised.
Fee Increases and Engineered Stone Ban
The Australian Securities and Investment Commission (ASIC) will increase fees for registering, renewing, and reserving company and business names in line with the Consumer Price Index. Moreover, a ban on the manufacture, supply, processing, and installation of engineered stone due to health risks will take effect from 1 July, with some states having specific transitional arrangements.
New Commonwealth Procurement Rules and Workplace Laws
Changes to Commonwealth Procurement Rules will also come into effect, increasing opportunities for small and medium-sized enterprises (SMEs) to win government contracts. The new Environmentally Sustainable Procurement Policy will require businesses to substantiate environmental claims. Additionally, new workplace laws affecting casual employment and protections for gig economy workers will be introduced, with the right to disconnect for small businesses being delayed until August 2025.
Advisory and Scam Alert
Billson stressed the importance of understanding these changes and consulting with trusted advisers like accountants and bookkeepers. He also warned of increased scam activities targeting small businesses during the end of the financial year. “Please be alert to scams, as this is a time when scammers try to trick small businesses by impersonating official agencies or offering unrealistic deals,” he cautioned.
For further information and resources, business leaders can visit the Fair Work Ombudsman, Australian Taxation Office, and other relevant agency websites.
A useful end of financial year checklist for small business relating to tax, insurance and avoiding scams is available here.
The Tax Office provides a Tax Time Tool Kit to assist small business to prepare their tax returns, which includes a directory of links to find information, tools, calculators and other support and resources. It will be available in early July from the ATO.
The ATO also provides a cash flow coaching kit, which is available through its new Essentials to Strengthen Your Small Business.
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