There are a number of tax changes coming into effect as of 1 July 2014 that will affect all businesses. As a business owner, you need to ensure you are keeping up to date with all tax changes to make sure you are doing what’s right for your business and its employees. Check out our list to see how the changes will affect your business.
New Tax Amendments
1. Super Guarantee Rate Increase
The superannuation guarantee rate is to increase to 9.5% on 1 July 2014, and is to remain until 30 June 2018. It will then increase by .5% each year until it reaches 12%.
2. Medicare Levy Increase
The medicare levy will increase from 1.5% to 2% for people who do not already have private health cover. This affects businesses because employers will be required to install new tax rates tables into their payroll software, to capture this increase from 1 July 2014.
3. Increase in FBT & Gross-up Rates
Due to the increase in medicare levy, a new FBT rate and gross-up rate apply from 1 April 2014 (i.e the 2015 FBT year and following). The FBT rate will increase from 46.5% to 47%. The gross-up rates for 2015 will be as follows:
o Type 1 benefits grossed-up by 2.0802, from 2.0647
o Type 2 benefits grossed-up by 1.8868, from 1.8692
Employers will need to ensure that they review and adjust employee salary packages to take into account these changes.
4. Changes to Aged-based Concession
The concessional superannuation contribution caps for the 2013/2014 year based on an individuals age are:
o Age 60 and over on 30 June 2014 – $35,000
o Age 59 and under on 30 June 2014 – $25,000
The concessional superannuation caps for the 2014/2015 year based on a person’s age have changed as follows:
o Age 49 and over on 30 June 2014 – $35,000
o Age 48 and under on 30 June 2014 – $25,000
Please not that the employer super guarantee contributions and salary sacrifice are included in these caps.
If you need any help regarding these tax changes and how they affect your business, give the Quinn Group accountants and lawyers a call on 1300 784 667 or submit an online enquiry.