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From 1 July 2024 the amount you can contribute to your superannuation will increase.
The amount you can contribute to superannuation will increase on 1 July 2024 from $27,500 to $30,000 for concessional super contributions and from $110,000 to $120,000 for non-concessional contributions.
The contribution caps are indexed to wage growth based on the prior year December quarter’s average weekly ordinary times earnings (AWOTE).
- For those with the disposable income to contribute, superannuation can be very attractive with a 15% tax rate on concessional super contributions and potentially tax-free withdrawals when you retire.
- For business owners who might have had an exceptional year or sold their business, it’s an opportunity to get more into super but caution is needed with the timing of contributions to maximise outcomes.
- If you know you will have a capital gains tax liability in a particular year, you may be able to use ‘catch up’ contributions to make a larger than usual contribution and use the tax deduction to help offset your capital gain tax bill.
- This strategy is dependant upon you meeting the eligibility criteria to make catch-up contributions and you lodge a Notice of Intent to Claim (or vary) a deduction for personal super contributions, with your super fund.
Six Significant Changes Small Business Owners will face from 1 July 2023
The Australian Small Business and Family Ombudsman, Bruce Billington, has reported six (6) important changes owners and managers of small entities need to be across by 1st July 2023.
“It is essential that small-business owners and managers understand these changes. They should check their payroll and accounting systems have been updated and they should talk to trusted advisers like accountants and bookkeepers. It is important to get this right... there are significant changes that cannot be put aside” - Bruce Billson, Australian Small Business and Family Ombudsman.
Some of the changes 1 July 2023 will bring small businesses include:
Instant Asset Write-offs | Energy Incentives | Super Guaratyee changes | New Minimum Award Wages | Single Touch Payroll | Paid Parental Leave
1. Instant asset write-off
- From 1 July the instant asset write-off threshold for eligible small businesses would be $20,000 on a per-asset basis for 12 months.
- From 1 July assets valued at more than $20,000 that could not be immediately deducted, could be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each following year.
2. Small-business energy incentive
A tax incentive worth up to $20,000 would be available for small businesses next financial year to provide an additional 20 per cent depreciation for eligible assets that support electrification and the more efficient use of energy by small businesses.
- The scheme would provide businesses with an annual turnover of less than $50 million incentive to save on energy bills by making investments such as electrifying their heating and cooling systems, upgrading to more efficient fridges, or even induction cooktops.
While the scheme was still pending passing through Parliament, eligible assets or upgrades would need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
3. Super guarantee
From 1 July the super guarantee rate would increase from 10.5 per cent to 11 per cent for all employees eligible to receive superannuation.
Small-business owners will need to use the new rate to calculate super on payment made to employers on or after 1 July, even if some or all of the pay period was for work done before 1 July.
4. National minimum wage and award rate
From the first full pay period on or after 1 July, the national minimum wage will increase to $23.23 per hour and award rates of pay would be increased by 5.75 per cent.
5. Single touch payroll
Small businesses are alerted to the requirement to have finalised their employees' single touch payroll data by 14 July.
- The ATO reports employers are required to report pay-as-you-go withholding information every time they pay employees through single touch payroll with the amounts reported to be used as pre-fill information in activity statements from 1 July.
6. Paid parental leave scheme
For employees whose baby was born or placed in their care on or after 1 July, the scheme would change with the 18 weeks of paid parental leave entitlement combined with the dad and partner entitlement of two weeks’ pay.
- The change would mean partnered couples will be able to claim up to 20 weeks of paid parental leave between them, while parents who were single at the time of their claim could access the full 20 weeks.
Personal liability and the New Rules for Company Directors
- Director Penalty Notices (DPN's) are legal notices issued by the Australian Taxation Office (ATO) to company directors who have failed to meet their obligations under certain tax laws. The purpose of a DPN is to encourage directors to ensure their company meets its tax obligations, and to provide a mechanism for the ATO to collect outstanding tax debts from companies that have failed to pay.
New ATO Checklist for Trust Distributions
Recent court cases extending the obligations of trustees to consider beneficiaries (see Re Owies Family Trust [2020] VSC 716) making managing a family trust considerably more complex.
