retail shopping mall

Minimum Wage Rate 2.5% increase

Queensland Minimum Wage Rate will increase by 2.5%

Minimum wages in the Retail Award increase from 1 September.

The FWC’s Pay Calculator and Pay guides now have updated rates.

For the list of awards that will increase later in the year, see When does the increase start?

Following the Annual Wage Review 2021, the Fair Work Commission (FWC) announced a 2.5% increase to the national minimum wage and all award wages. The increase to award wages is happening in 3 stages. The FWC has also issued decisions to change some terms and conditions in several awards.

What do you need to do?

You can find the new minimum pay rates in the FWC’s Pay Calculator and Pay guides, for all awards that increased from 1 July and 1 September 2021. The Pay Calculator and pay guides will be updated for the awards increasing in November closer to their start date. For the list of awards that increase in November, see When does the increase start?

You can also use Find my award if you’re not sure which award applies to you.

Who does the increase apply to?

The increase applies to anyone who is paid minimum award wages or the national minimum wage.

Most employees are covered by an award. If you’re not sure which award applies, use Find my award.

If you’re covered by a registered agreement, you should check it to see whether this increase affects you.

For anyone not covered by an award or an agreement, the new national minimum wage is $772.60 per week or $20.33 per hour.

When does the increase start?

The new national minimum wage applies from your first full pay period on or after 1 July 2021.

There was also an increase to the Super guarantee for all eligible employees from 1 July 2021.

The increase to minimum award pay rates is happening in 3 stages.

The increase doesn’t affect employees who already get paid more than their new minimum wage.

1 July 2021 award increase

Most awards increased from the first full pay period on or after 1 July 2021.

1 September 2021 award increase

The increase for the Retail Award applies from the first full pay period on or after 1 September 2021. This means if you have a weekly pay period that starts on Mondays, the new rates apply from Monday 6 September 2021.

You can find the new minimum rates in our Pay Calculator and Pay guides.

1 November 2021 award increase

21 awards increase from the first full pay period on or after 1 November 2021. Read more »

Please note, wage rate changes will need to be done manually which we do in consultation with our payroll clients. We strongly recommend that you make time to check your settings.

For assistance, contact our Xero Platinum Certified business bookkeepers at Notch Above Bookkeeping, Australia-wide, on 1300 015 130.

Source: Fair Work Ombudsman

workers looking at laptop

STP Phase 2 starts January 2022

Learn what STP Phase 2 means for employers

Single Touch Payroll (STP) Phase 2 reporting starts 1 January 2022.

If you employ staff, you’ll need to be ready for this change.

If your business uses Xero, it will be compliant.

If not — or you know someone who is not — there’s time to start thinking about and planning your STP Phase 2 reporting now.

STP Phase 2 reporting means changes to the way employers report:

  • amounts paid to staff
  • income types
  • employment conditions.

The way you lodge and the due date of your STP reports don’t change.

Your payroll software should be updated by your software provider with steps provided for you to take. However if you use a manual system, we strongly recommend that you make time to check your settings in advance of the changeover deadline.

Check the ATO’s guidelines and contact the team at Notch Above Bookkeeping on 1300 015 130 to help you understand the changes and what they mean for your business.

Australian Accounting Awards Bookkeeping Firm of the Year Finalists 2021 and 2020.

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Employment Contract Tool

Superannuation guarantee increase on 1 July

Employers should be managing the super guarantee (SG) increase which comes into effect 1 July

An SG base rate rise is set from 1 July which will increase from 9.5% to 10%, followed by incremental half percentage point increases each year to 12% on 1 July 2025.

Businesses owners should establish an approach strategy to the increase now because missing deadlines is likely to attract ATO attention. And it should be done with transparency that clearly communicates how employees’ payslips will be impacted.

Employers should keep in mind that this is not a one-off increase.

While the legislation is for the employer to contribute the extra half per cent without impacting take-home wages, this may not be the case across all workplaces. Check with us first for any clarification required about your business or sector.

Employee contributions are required to be paid on at least a quarterly basis. Employers are urged to brace for the SG increase on 1 July by allowing plenty of time for payroll changes via business activities that sustain cash flow.

Do note that software providers will be making the adjustment to their systems but, depending on your setup, if you have manually entered a rate you may need to adjust this.

Click here to review the ATO’s super rates and thresholds or contact Notch Above’s Bookkeeping specialists Australia-wide on 1300 015 130 for specific advice about your payroll.

Australian Accounting Awards Bookkeeping Firm of the Year Finalists 2021 and 2020.

payroll

Single Touch Payroll changes

What small businesses need to know about changes to STP this EOFY

As a small business owner, you’ve likely heard about Single Touch Payroll (STP) by now.

Many employers will already be using STP. However, with the ATO rolling the initiative out in stages, there are still some that have been offered exemptions. That is, until now.

From 1 July this year, most small businesses will need to be STP compliant.

This includes small employers with closely held payees, as well as some micro-businesses and seasonal employers. The changes could mean that you have to opt into STP for the first time or start filing employees who aren’t already being reported with the ATO. If you’re feeling unsure about whether these changes will affect your business, we’ve compiled all the information you need to help determine your next steps.

Although EOFY is just around the corner, there’s still time to get prepared. With the help of your bookkeeper and Xero, together, we can make the transition to STP as smooth as possible.

What does ‘closely held’ mean?

According to the ATO a closely held payee (otherwise known as a closely held employee) is an individual directly related to the entity from which they receive payments. For example, this would include relatives in a family business, or beneficiaries of a trust fund.

Depending on your working arrangements, some businesses process irregular or infrequent pay runs for family members on their books. That’s why, up until 1 July 2021, small employers (with 19 or fewer payees) have been exempt from STP reporting of closely held payees.

What’s changing with how my business remunerates closely held payees?

By the end of FY21, employers with fewer than 19 employees will have to report closely held salaries or wages through STP. Whether it’s your sister, great-uncle, cousin or in-law, every family member on your books, counts. There are three payment reporting requirements to be aware of:

  1. Report and process payroll through STP on or before payday
  2. Report the accurate payroll amount with STP once per quarter, on or before the BAS due date
  3. Report a reasonable estimate with STP once per quarter, on or before the BAS due date

Out of the three reporting options, there’s no one-size-fits-all approach – it comes down to what works best for your business’ needs.

Are there any other changes to know about?

As well as small employers with closely held payees, some micro and seasonal employers will now have to report on or before the payment date – not quarterly – unless they receive a concession. This includes businesses with four or fewer employees, including the following industries:

  • Agriculture, fishing and forestry
  • Not-for-profit clubs and associations
  • Seasonal and intermittent employers

Microbusinesses in each category may still be eligible for STP reporting concessions, such as quarterly or exceptional circumstances exemptions. Ask your advisor about how you can apply for a concession, and head over to the ATO website for more details.

The STP changes for this EOFY are one of the final hurdles in transitioning most Australian small businesses to a more streamlined reporting system. Although the initiative is still evolving, with the support of Xero and your trusted bookkeeper, you’ll be able to tackle any new changes head-on.

Notch Above Bookkeeping has been providing business owners with accurate and timely bookkeeping services that makes them more efficient and gives them peace of mind for 15 years. Let us help take your business to the next level of bookkeeping digitally, via the cloud! Call us on 1300 015 130.

The team from Notch Above Bookkeeping

Winning and keeping talent

How business owners can win and keep the right talent in 2021

The ongoing uncertainty around COVID-19 has resulted in an unstable economy, with the impact on the job market hard to predict.

Despite this, many small business owners remain optimistic about the coming months.

In fact, Xero’s latest research revealed that almost half (48 per cent) of SME owners believe small businesses will be key to kickstarting the economy once lockdown and tier systems are relaxed – positive news for jobseekers.

Still, optimism must be met with preparation. If you’re a small business owner, here are four ways to set yourself apart as a top employer. 

Offer autonomy 

Many of the ways that COVID-19 has changed the way we work are here to stay, and business owners need to learn how to support their employees in the ‘new nine to five’. For example, in a post-Covid world, some employees may prefer working in an office for structure and collaboration, while others will require flexible working to flourish. It’ll be challenging for both employers and employees to strike the right balance. However, the companies that stand out post-Covid will be the ones that pay attention to how the pandemic has affected their employees’ needs and working styles, and then adapt accordingly.

Invest in your technology

The pandemic has been a catalyst for growth for the adoption of many new tech tools. Our research suggests that over a quarter (26 per cent) of small business owners are now using technology that is increasing the productivity of their business. It also suggests one in five (20 per cent) are looking to invest in artificial intelligence (AI) and machine learning to automate parts of their business. This explosion of technology means a prospective employee may choose to leave your employment to work with a more technology-savvy competitor.

Staying at the forefront of technology with cutting-edge software will position your business as ambitious and forward-thinking. Technology has been at the heart of helping firms adapt throughout the pandemic, and business owners should not underestimate the role it will have in the economic bounceback.

Build an effective employee value and wellbeing proposition

Ensuring the mental and physical wellbeing of employees should not be a reactive exercise when adversity strikes, but a continual process of prevention and protection. In order for employees to thrive, they need to know that their employers care for them around the clock, and not just through challenging times.

Forward-looking businesses will empower employees to find the right mix of tools for their individual needs. For some, this could mean safeguarding time to recharge or prioritise sleep or exercise. Others might carve out time for mindfulness or disconnecting from technology.

Another central element of your employee value proposition is compensation and benefits. To attract top talent, you should reevaluate existing employee packages and ensure you’re making an attractive offer, because giving people what they deserve pays dividends.

Keep your business accountable on diversity

A recent survey by McKinsey & Company showed that nine out of ten executives have found executing their DEI strategies challenging during the pandemic. Although companies have responded rapidly, employees, and in particular diverse employees – including women, LGBTQ+, people of colour and working parents – have struggled the most in the pandemic. The result is that only one in six employees from a diverse background feel supported. This means business owners now have a clear opportunity to build a more equitable and inclusive workplace that strengthens their organisations far beyond COVID-19.

Employees have never required more support than they do right now. For many, this period has been a time of uncovering a radical new approach to work and to life, and this might mean new or higher expectations from employers in a post-COVID world.

Businesses that seize the moment by paying attention, listening to their employees and remaining responsive to changing themes will not only be better placed to support their employees, but will drive sustainable business performance and attract a wider pool of talent to drive future growth.

Notch Above can take care of all the bookkeeping tasks you would rather not do, like bank reconciliations, supplier payments, payroll processing, invoicing and debtor management and BAS returns. We set up systems and checklists to ensure nothing is missed and things are processed when it suits you. We can be involved as little or as much as you like, we give you the flexibility to decide what’s best for your business. Call us today on 1300 015 130.

Source: Xero

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JobKeeper is changing

Here’s what you need to know

Many Australian small businesses say JobKeeper has been a lifesaver in these difficult times, and Xero Small Business Insights data seems to bear that out. So it’s good to hear JobKeeper has been extended, with some notable changes. We’ve tried to capture what’s new with the wage-subsidy program below.

There are some complexities, so we recommend you see your trusted bookkeeper or accountant for the fullest picture, as well as visit the ATO’s JobKeeper extension page.

Eyes on September

If you want the JobKeeper changes summarised in 15 words, the Institute of Certified Bookkeepers has captured them nicely: “Nothing changes before end-September. Then some employers become ineligible, and some receive less.

You may remember that in your original application for JobKeeper, you had to document a one-time drop in business revenue of at least 30%. It only applied to eligible employees who were with you before 1 March 2020.

After end-September 2020, you’ll need to document an ongoing actual decline of 30% or more. And the decline must be quarterly, whereas at JobKeeper’s launch, you had more flexibility in choosing a period. It will still apply only to eligible employees who were with you before 1 March.

What does this change look like in practice?

For employers to be eligible for JobKeeper payments from 28 September 2020 to 3 January 2021, they must have recorded an actual decline in turnover of 30% or more in both:

  • the quarter ended 30 June 2020 (compared with the same quarter in 2019)
  • the quarter ended 30 September 2020 (compared with the same quarter in 2019)

In the new year, the same pattern holds. To be eligible for JobKeeper payments from 4 January to 28 March 2021, you must have also had an actual decline in turnover of 30% or more in the quarter ending 31 December 2020 compared with the same period in 2019. You can rely on the team at Notch Above Bookkeeping to help you crunch the numbers. And note the ATO does allow for alternative tests.

Smaller subsidy

If you remain eligible for JobKeeper payments after September, you’ll find that the wage subsidy is less generous. The $1,500 flat payment per employee, per fortnight, could drop by more than half. There are no changes to employee eligibility requirements. The changes are as follows.

For eligible employees who work 20 hours or more per week:

  • $1,500 per fortnight payment continues until the fortnight ended 27 September
  • $1,200 per fortnight until 3 January 2021
  • $1,000 per fortnight until 28 March 2021

It remains to be seen whether JobKeeper will extend past March 2021.

For eligible employees who work less than 20 hours per week:

  • $1,500 per fortnight payment continues until the fortnight ended 27 September
  • $750 per fortnight until 3 January 2021
  • $650 per fortnight until 28 March 2021

Remember that as an employer, you must pay your staff before claiming the reimbursement from JobKeeper. So you’ll want to take a close look at your revenue, your payroll and determine how these changes will affect your cash flow. Again, it’s advisable to speak with your bookkeeper or BAS agent to ensure you’re factoring in everything.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business payroll covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme call our team on 1300 015 130 for specific advice regarding your business.

Source: Xero

JobKeeper 2.0

Extension of the JobKeeper payment

It was welcome news that the government has announced the JobKeeper Payment scheme will be extended by six months until 28 March 2021, doubling the length of the initial scheme.

However payments have been reduced and business eligibility will be reassessed:

  • The rate will reduce from $1,500 per fortnight to $1,200 or $750 depending on the hours eligible employees worked in February 2020
  • From 4 January 2021 it will reduce again to $1,000 or $650 per fortnight, again, depending on hours worked in February 2020
  • Turnover is retested each quarter to ensure businesses remain eligible. To be eligible for the first round, a reduction in turnover will need to be shown for the June and September quarters based on prior year.

JobKeeper 2.0 is yet to be legislated but we expect it will be passed into law in late August at which time the finer details will be known.

We will be in touch with all clients currently receiving support in respect of their JobKeeper requirements to ascertain if they continue to be eligible ensuring that they do not miss out on this important stimulus measure.

Please contact your Notch Above consultant directly if you wish to discuss how this affects your business. For further details please see this Treasury factsheet and our video on this page.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business bookkeeping covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme, read more on the ATO’s website or call our team on 1300 015 130 for specific advice regarding your business.

JobKeeper audits underway

First reports of ATO audits lands one small business in debt

Imagine going through all the rigmarole to apply for JobKeeper when COVID-19 restrictions were rife, only to find your application rejected months later by Tax Office auditors?

That is what has now happened to one small business owner who took a DIY approach to their JobKeeper application.

The worst part is that they now have a $30,000 debt with the tax office and will not be allowed to recover any JobKeeper payments already paid to their employees.

Because of this, the business is possibly facing bankruptcy.

From the outset of the JobKeeper payment subsidy being made available to eligible Australian employers, the ATO has continually cautioned applicants to keep contemporaneous documentation of their calculations and advice to avoid inevitable audit scrutiny.

While the ATO always declared taking an ‘understanding and sympathetic’ approach when reviewing JobKeeper turnover projections, recipients have been urged to document their application and estimates as much as possible to cover all bases when the ATO comes knocking.

Be assured that the ATO will come knocking. The ATO COVID-19 Taskforce reaffirmed their approach in its Law Companion Ruling 2020/1.

“In terms of our attitude to compliance, this program is about helping Australians who are experiencing financial difficulty and it is not drawn at the hard line in terms of 30 per cent where I go out and investigate the person who is sitting at 29.95 per cent,” the Taskforce Chair said. “The focus is on people who will be deliberately rorting the system.”

Not that the small business owner set out to deceive the tax office. However their misunderstanding or misinterpretation of the rigorous eligibility and reporting requirements caused them to come unstuck, particularly when the rules around the JobKeeper were constantly changing during the first release of the scheme.

Coherent and cogent documentation is the best defence should the ATO start asking you for information. It is being able to produce a piece of paper or record that explains and therefore satisfies an auditor’s demand for proof.

A mistake that many taxpayers make is downgrading the ATO’s seriousness around JobKeeper audits. Thinking ‘I’ll worry about it when it happens’ is compounded by the passing of time which blurs our recollection of events because so much has happened in the interim, so make sure you check that all your pays are correct and on time.*

Had the business owner sought professional advice from a creditable bookkeeping professional, the outcome could’ve been completely different.

From builders to pharmacies, medical clinics to dental practices, Notch Above Bookkeeping has your business bookkeeping covered. If you have questions in relation to eligibility and reporting requirements for the JobKeeper Payment scheme, read more on the ATO’s website or call our team on 1300 015 130 for specific advice regarding your business.

* If JobKeeper is being processed by Notch Above Bookkeeping on behalf of your business, then be assured this is in hand.