Law Changes Impacting Business Owners

As a business owner and employer there are a number of legislative changes that came into effect on July 1, 2018 that you should be aware of including:

Single Touch Payroll

How businesses report their payments to staff to the Australian Taxation Office changed on July 1, 2018. Single Touch Payroll (STP) became compulsory for employers with 20 or more employees which means employers will be reporting their employee’s salaries and wages, pay-as-you-go withholding and superannuation information via their payroll software each time they make a payment to staff. From July 1, 2019 employers with 19 or fewer employees will need to comply with the Single Touch Payroll  

Superannuation

Employers should also be aware of a change regarding the Superannuation Guarantee Charge (SGC). Employer’s SGC obligation for 2018/19 remains at 9.5 percent of the employee’s ordinary time earnings and will apply to the increased base of $54,030 of the employee’s quarterly earnings.

Also, the SGC amnesty that has been in place since May will continue until May 23, 2019. This means employers who voluntarily disclose their previously undeclared shortfalls in Superannuation Guarantee contributions during this period will not be liable for the administration component and penalties that may otherwise apply to late Superannuation Guarantee payments. In addition, they will also be able to claim a tax deduction for catch-up payments made in the 12-month period. The amnesty applies to shortfalls between July 1, 1992 and March 31, 2018.

Minimum Wage Increase

The national minimum wage increased by 3.5% from July 1, 2018. From that date, employees will be entitled to a minimum take-home weekly pay of $719.20, or $18.93 per hour. This represents a weekly increase of $24.30 for approximately 2.3 million Australians and modern award wages will also be increased by the same amount. The Fair Work Ombudsman is calling on all employers to check the new pay rates that will now apply to their business, which they can do via the Ombudsman’s updated Pay and Conditions Tool located at https://calculate.fairwork.gov.au/

Penalty Rates

The second lot of changes to Sunday penalty rates for workers in the fast food, retail, pharmacy and hospitality sectors also commenced on July 1. Last year, penalty rates across those sectors dropped by 5% from the previous Sunday rates, but the cuts are larger in 2018/19. For example, Sunday loading rates for full-time and part-time workers covered by the Retail Industry Award will drop from 195% of the base hourly rate to 180% of the base hourly rate.

Unfair Dismissal Threshold

At the start of each new financial year, the high-income threshold for unfair dismissal claims also changes. From July 1, the threshold increased from $142,000 to $145,400.  

If an employee’s annual earnings exceed this threshold and they are not covered by a modern award or enterprise agreement, they will not be able to bring an unfair dismissal claim. If an employee’s annual earnings exceed this threshold, you will be able to make a guarantee of annual earnings with him or her and preclude application of any modern award that would otherwise apply. The maximum amount the Fair Work Commission can order in compensation for an unfair dismissal case will also increase to $72,700 for dismissals occurring on or after July 1, 2018. This is an increase of $1,700 from last year.

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This article forms part of our September 2018 Business Accelerator Magazine. Click HERE to download the full edition or browse other articles in this edition below:

Other Articles in this Edition:

• Thinking of Starting a Business?
• Beware Just Claiming 'Standard Deductions' This Financial Year
• What's on the ATO Hitlist this Year?
• Franchisee Gets Massive Fine for Poor Record-Keeping 
• Death and Taxes
• Expand Your Customer Base with Facebook Advertising
  

IMPORTANT DISCLAIMER: This article contains general advice only and is prepared without taking into account your particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should speak to a licensed financial advisor who should assess its relevance to your individual circumstances. While the firm believes the information is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this article is not considered financial product advice for the purposes of the Corporations Act 2001.