The new financial year has arrived, bringing significant changes to Australian taxation & payroll.
The first step in remaining compliant is understanding your business’ new payroll obligations. To help in this regard, we’ve examined the latest changes and summarised them for your convenience.
Fast-track your research with this guide to the 2019 / 2020 financial year.
The Fair Work Commission has announced a 2.9% increase to the minimum wage. The increase will apply from the first full pay period starting on or after 1 July 2019.
The national minimum wage will be $740.80 per week, or $19.49 per hour. The hourly rate has been calculated by dividing the weekly rate by 38, on the basis of the 38-hour week for a full-time employee.
This might have an impact on your Australian operations,
from a budgetary perspective.
Superannuation on Leave Loading
The ATO released recently further precision on superannuation on annual leave loading and confirm that annual leave loading should be considered in the calculation of superannuation unless the employer can provide evidence that annual leave loading is not part of Ordinary Time Earnings (such as Overtime).
Key Rates and Thresholds
1. Lump Sum D Threshold
The Lump Sum D threshold will increase to $10,638 + $5,320 for each completed year of service.
2. ETP thresholds
The ETP indexed cap is changed to $210,000 from 1 July 2019.
The Whole of Income cap remains at $180,000 as this is a non-indexed figure.
3. Maximum employer super contribution cap
Will increase to $5,250.65 per quarter from 1 July 2019. (This represents an annual equivalent of $21,002.60)
4. Quarterly contribution base
For the financial year 2019-2020, the maximum quarterly contribution base is $55,270. (This represents an annual equivalent of $221,080.00)
5. Payroll tax thresholds
The threshold will increase from $850,000 to $900,000 for the financial year 2019-20. The tax rate remains unchanged at 5.45%.
The threshold will increase from $1,100,000 to $1,300,000 for the financial year 2019-20. The QLD government have introduced a new rate for employers who pay more than $6.5 million wages:
– 4.75% for employers or groups of employers who pay $6.5 million or less in Australian taxable wages.
– 4.95% for employers or groups of employers who pay more than $6.5 million in Australian taxable wages.
The regional employers may be entitled to a 1% discount on the rates above.
The tax rate will increase from 6.5% to 6.85% for the employers or group of employers paying taxable wages of $1.5 billion or more.
The other rates and threshold amount remain unchanged.
Processing payroll is hardly an easy feat. Not only does it require a complex understanding of surrounding regulations, but also requires in-depth knowledge on how to apply it for your particular business.
Needing help with your payroll? Looking to assure compliance? Perhaps you need to outsource your payroll to a trusted partner. If still unsure of the benefits of outsourcing your payroll, check out our FAQs on why you should.