With the commencement of the 2021-22 financial year on 1 July 2021, there are many changes to be aware of as an employer. From new obligations to updated legislation, this new financial year brings with it numerous new responsibilities and even rewards. Let’s delve into the 2021-22 new financial year changes!
The Superannuation Guarantee Rise
From the new 2021-22 financial year, a big change will be the 0.5 per cent boost to the superannuation guarantee. Rising from 9.5% to 10% on 1 July, legislation has the super guarantee increasing by 0.5% each year until reaching 12% by 2025. As discussed in our article on employment contracts and considerations regarding this superannuation guarantee rise, some employees may suffer a hit to their salary if super is included in their salary as opposed to being an additional amount on top of it. As an employer, you will be required to accommodate the changes of this new law and pay your employees 10% in super from 1 July 2021.
Single Touch Payroll Changes
Currently, in relation to most employees, Single Touch Payroll (STP) reporting is mandatory and does not include closely held employees. From 1 July 2021, however, this will change. From 1 July 2021, closely held employees need to be reported through STP for small employers with 19 or less employees. There is the option to report this information on a quarterly basis.
Notably, employers must continue to report all information about other employees (known as arm’s length employees) via Single Touch Payroll on or before each pay date, which is the statutory due date. Small employers with only closely held employees have been previously exempt from STP reporting for the 2019-20 and 2020-21 financial years.
SMEs Corporate Tax Win
The company tax rate will decrease to 25 per cent in the new financial year for certain small to medium sized businesses. Your business will qualify if you have an annual turnover of less than $50 million.
Minimum Wage Increase to by 2.5% for Most Awards
Following the Annual Wage Review 2021, the Fair Work Commission announced a 2.5% increase to minimum wages, with most of these increases occurring on 1 July 2021. This will apply to all award wages, with the award increase happening in 3 different stages depending on your employees’ industry. Most award pay rate increases will occur at the start of the new financial year but it will be important to check the Fair Work Ombudsman’s list of pay changes to clarify what you will need to action for your employees.
These new financial year changes, particularly the superannuation amendments, are a lot to process for your business. You will have to pay your employees greater superannuation entitlements and accommodate for the increased rates coming this new financial year. Have questions? Call our team on 1300 QUINNS for more information. We at The Quinn Group are experienced lawyers, accountants and mergers & acquisitions specialists, with expertise in all things ‘new financial year’ for your business. We are very well-equipped to answer all your questions and queries relating to tax, business, new legislation and employment law concerns.
If you would like help with respect to any area of improving your business and meeting your obligations, particularly employment law and business related matters, contact our team of experienced lawyers and accountants by submitting an online enquiry, calling us on 1300 QUINNS or alternatively, +61 2 9223 9166 to arrange a teleconference or appointment.