FY 2023 Key Information

Fair Work Australia and the ATO have released new Key Rates and Thresholds applicable for the Financial Year 2023. Here are some of the most important ones that affect small businesses.

Payroll Key Rates and Thresholds

Fair Work Minimum Wage and Award Pay Conditions

The National Minimum Wage has increased for FY 2021 by 5.2%. The new Minimum Wage Pay Rates are:

  • $21.38 Hourly Rate (Full-Time Employees*)
  • $812.44 Weekly Salary (Full-Time Employees*)
    *25% Loading still applies to Casual Employment

However, a reduced percentage increase (4.6%) will apply to all Modern Awards.

Allowances

Laundry and Dry Cleaning Allowance

The annual tax-free laundry allowance remains at $150 per annum.

Car, Meals and Travel Allowances

The cents per km allowance has increased to 75 cents per Km (up to a maximum of 5,000 Km per vehicle).

The Overtime Meal Allowance remains at $32.50 per meal.

The ATO has not yet updated the rates for the reasonable travel overnight allowances applicable to both metropolitan cities and country centres. Once they publish the update, we will update the link on this page.

ATO – Car Km Allowances

ATO – Dry Cleaning and Laundry Allowances

ATO – Overnight Travel Allowances

Superannuation  Key Rates and Thresholds

The percentage of Superannuation Contribution Guarantee has increased to 10.5% of Ordinary Time Earnings.

The minimum monthly threshold of $450 per month has been removed as of 1st July 2022.

The quarterly superannuation maximum contribution cap has increased for FY 2023 to $60,220 wages per quarter (allowing a maximum amount of Quarterly Superannuation Guarantee Contribution of $6,323.10).

The annual Concessional Contribution remains at $27,500 per annum with the ability to carry forward unpaid contributions for a 5 year period. The Annual Non-Concessional Contribution cap will also remain at $110,000.

More detailed information on the FY2023 Superannuation increases and future changes to Superannuation is available in a separate blog post on our website.

ATO – Superannuation Key Rates and Thresholds

Lump Sums and Employment Terminations

Genuine Redundancy and Early Retirement Payment Limits
The limit of the Tax-Free Component for Genuine Redundancy and Early Retirement Scheme has increased for the FY 2023 to the following:

  • Base Limit: $11,591
  • Each Year of Completed Service: $5,797

Death & Life Benefits ETP & Whole of Income Cap

The ETP cap for both Death & Life Benefits has increased for FY 2023 to $230,000.

The Whole of Income Cap stays at $180,000.

ATO – Tax-Free on Genuine Redundancy

ATO – ETP and Whole of Income Caps

Payroll Tax Rates and Thresholds

The applicable Payroll Tax rates and thresholds for the FY 2023 are the following:

  • ACT – The Payroll Tax rate and thresholds remain unchanged at 6.85% with an annual threshold of $2 million in annual Australian Taxable wages;
  • NSW – The Payroll Tax rate is set to increase to 5.45% whilst the annual threshold remains unchanged at $1.2 million in annual Australian Taxable wages;
  • NT – The Payroll Tax rate and thresholds remain unchanged at 5.50% with an annual threshold of $1.5 million in annual Australian Taxable wages;
  • QLD – The Payroll Tax rate and thresholds remain unchanged from 4.75% to 4.95% with an annual threshold of $1.3 million in annual Australian Taxable wages;
  • SA – The Payroll Tax rate and thresholds remain unchanged at a maximum of 4.95% with an annual threshold of $1.5 million in annual Australian Taxable wages;
  • TAS – The Payroll Tax rate and thresholds remain unchanged at 6.1% with an annual threshold of $2 million in annual Australian Taxable wages;
  • VIC – The Payroll Tax rate and thresholds remain unchanged at 4.85% or 2.425% (applicable to regional employers) with an annual threshold of $2 million in annual Australian Taxable wages;
  • WA – The Payroll Tax rate and thresholds remain unchanged at 5.5% with an annual threshold of $1 million in annual Australian Taxable wages;

Motor Vehicles Key Rates & Thresholds

The Income Tax and GST Threshold for purchasing a new car has increased for FY 2023 to $64,741.

The Luxury Car Threshold for the FY 2023 has not yet been increased from the FY 2022 thresholds of:

  • $69,152 (Non-Fuel-efficient vehicles)
  • $79,659 (Fuel-efficient vehicles)

ATO – Car Cost Limits

ATO – GST on Motor Vehicles

ATO – Luxury Car Tax Rates and Thresholds

Instant Asset Write-Off

No formal updates at this stage for Instant Asset Write-Off. For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:

  • The threshold amount for each asset is $150,000
  • Eligibility extends to businesses with an aggregated turnover of less than $500 million.

ATO – Instant Asset Write-Off

Is your Accounting Software up to date? Compare the latest updates on the ATO and Fair Work Rates and Thresholds with the FY 2022 Key Pay Rates & Thresholds.

CHANGE OF STRUCTURE

CHANGE OF STRUCTURE

It is not uncommon for clients to change the structure used to operate their business. While accountants will typically be the ones providing the strategic advice surrounding a change
of structure, once the decision has been made, much of the implementation will fall to the bookkeeper. A raft of practical, operational and tax consequences emerge when a structure is changed, which demands specialist knowledge of the subject matter and an appreciation of the correct bookkeeping techniques to use.

BACKGROUND

There are many factors that can lead to a business changing its trading structure, some of which include:

  • Growth in the business
  • Simplication or downsizing of the business
  • Asset protection
  • Limiting of liability
  • Taxation considerations
  • Management changes, namely the addition or removal of persons that control the operation of the business
  • Ownership changes, such as the facilitation of additional investors
  • Commercial / contract requirements
  • Operational reasons
  • Requirements imposed by lenders and financiers
  • Eligibility criteria for government grants.The rationale for, and strategic advice surrounding, a change in business structure will usually emanate from a tax agent, accountant, financial advisor, lawyer, or business strategist.

    While bookkeepers and BAS agents may not typically be proffering advice to bring about a change of structure, they will be heavily involved in many of the practical implementation steps.

    COMMON TRADING STRUCTURES AND CHANGES OF STRUCTURE

    The main types of trading structures used in a business which bookkeepers and registered agents and themselves deal with are:

  • Sole traders
  • Partnerships
  • Trusts; and
  • Companies.

Within each of these structures, there can also be different ownership structures at play. For example, a partnership involves 2 or more partners, but those partners could be any combination of individuals, trusts, or companies. In the case of trusts, a discretionary trust (otherwise known as a family trust) is the most common, however a unit trust might also be utilised, where the owners (unitholders) comprise any combination of individuals, trusts or companies.

When the ownership of a business changes from any one of these structures to another, then we have a change of structure on our hands. Theoretically, any combination of change is possible, however anecdotally, the most common change of structure scenarios which we observe in the small-to-medium business landscape are depicted in the following table (in no particular order):

Old structure

New Structure

Motivating factors

Sole Trader or Partnership

Trust or Company

  • Limited Liability
  • Asset protection
  • Taxation
  •  “Outgrowing” of structure

Trust

Company

• Flexibility of ownership
• Taxation
• Preference for being corporat-

ised

Partnership

Trust or Company

  • Limited Liability
  • Asset protection
  • Taxation
  • Change in partner circumstances

Regardless of what the outgoing and income structures are, the concepts and principles which will be discussed throughout this edition have broad applications.

IS THE NEW STRUCTURE PRE-EXISTING OR NEWLY ESTABLISHED?

In most cases, if a decision has been made to change a trading structure, a new entity will be established for that purpose. This approach is usually favoured because it provides the business with the opportunity to continue trading through a “clean skin” entity that has no pre-existing trading history or liabilities.

However, it is not necessarily the case that a new entity will be established. In some cases, the entity taking over the running of the business will be a pre-existing entity. There could be a number of reasons why this is the case:

  1. An entity may have been established in the past for a specific purpose, but that purpose did not materialize, meaning the entity has been “sitting on the shelf” since its inception;
  2. An entity may have been established in the past for a specific purpose and it carried out that purpose (e.g., running a business or holding investments) but has since become dormant;
  3. An entity may be active (e.g., running a business or holding investments) and a decision has been made that another business should be folded into this active entity.

If a client does have pre-existing entities already trading or “lying around”, then the existence of these entities will, or should, be taken into account in the advice being given to the client on the change of trading structure.

A number of factors, some of which are competing, would need to be weighed up in these circumstances in determining whether to utilize an existing structure or create a new one, such as:

BKB Edition 104

  • the availability of tax losses in the pre-existing entity;
  • tax implications of the transfer of the business, including the availability of capital gains tax concessions and rollovers;
  • commercial and lending considerations stemming from the utilization of an entity with a previous history (sometimes referred to as a “track record”) rather than a virgin entity;
  • asset protection considerations, including separation of risks;
  • the potential for liabilities (disclosed and undisclosed) to stem from the previous trading history of the pre-existing entity;
  • the administrative and practical advantages (if any) of utilizing a pre-existing structure that already has an established infrastructure, relationships with government agencies, systems, and processes, etc.

While our analysis throughout this edition will focus on the far more common scenario of a new entity being established to take over the operation of a business.

While acknowledging that in some cases, a pre-existing structure will be used, for the most part, our analysis throughout this edition will focus on the far more common scenario of a new entity being established to take over the operation of a business.

BROADER IMPLICATION OF A CHANGE IN STRUCTURE

A change of structure carries with it a raft of legal, tax, accounting and administrative implications:

New Legal Entity

A change in structure means that there is a new legal entity that will be operating the business and interacting with the outside world.

New Tax File Number (TFN)

The new legal entity will need to obtain its own tax le number (TFN), something that will typically be done shortly after its establishment.

New Australian Business Number (ABN)

The new legal entity will also need to obtain its own Australian Business Number (ABN). Commonly, the ABN application will be done at the same time as the TFN application.

New Bank Accounts

The new legal entity will need to establish its own bank account.

New Merchant Facilities

In most cases, merchant facilities through banks and other major financial institutions will be established in the name of a particular legal entity and therefore, linked to that entity’s bank account. Accordingly, when a new legal entity is established to operate the business, a new merchant facility will also likely need to be established.

For payment platforms and e-commerce facilities, the same may or not be the case. You will need to contact the individual provider to ascertain whether a fresh facility will need to be established for the new legal entity or whether in fact the existing facility can merely be transferred to the new legal entity.

New Credit Cards

The credit cards of owners and key employees will often be used in the running of a business and, in many cases, these credit cards will feed directly into the business’ accounting software.

If the credit cards are personal credit cards – in other words, the “borrower” is the individual, albeit that the cards may be paid by the business – then they may be largely unaffected by a change of structure. That said, if a direct debit is in place whereby the credit card’s closing balance is paid each month from the business bank account, then this arrangement will need to be updated so they are paid from the new legal entity.

On the other hand, if the credit cards are business credit cards – in other words, the “borrower” is the business entity – then with the establishment of the new legal entity to run the business, new business credit cards will need to be established and the old cards eventually canceled.

New accounting software file

The new legal entity will require a fresh accounting software file. One of the most common mistakes we observe in the bookkeeping sense surrounding a change of a structure is when the accounting software file for the old entity is merely “renamed” to that of the new entity and the bookkeeping carries on as usual.

The reality is that the old and new entities are separate legal entities. As such, the accounting software file for the old entity must remain separate from that of the new entity. Separation of these files is crucial to ensuring that the respective entities are correctly reporting for BAS and payroll/ STP purposes. Moreover, the separation of the old and new entities is vitally important to the tax agent when preparing end-of-year income tax returns.

New relationship with the ATO

The new entity will need to establish a new relationship with the ATO. The application for a TFN and ABN will be the starting point of that process. Once these identifiers have been obtained, a new Online Services for Business facility can be established to streamline the business’ dealings with the ATO.

Staff, payroll, super

The establishment of a new entity for the purposes of operating the business will usually give rise to the need for staff to be terminated in the old legal entity and re-employed in the new legal entity.

Customers

Customers will be dealing with a new legal entity. There can be many documents and agreements in place between a business and a customer which will require attention as they will typically need to be re-issued in the name of the new legal entity. Some of these include:

  • engagement letters
  • contracts
  • rental agreements
  • scopes of works
  • tenders
  • supply agreements
  • credit agreements
  • director and personal guarantees
  • direct debit agreements
  • warranties; and disclaimers.

    Typically, legal advice will be required in relation to these items.

    Aside from the above, there are some practical tasks involving customers that bookkeepers will tend to take the lead on.

    Firstly, a new tax invoice template will need to be created in the accounting software file of the new legal entity bearing, among other things, the new legal entity’s name, ABN and bank account details.

    Secondly, it is advisable to write to recurring customers (especially those who pay on account) to let them know of the change in structure. Apart from reassuring them that it is business as usual, this communication also provides an opportunity to advise customers that from a certain date, they should make payments into the new bank account.

    Suppliers

    The raft of documents and agreements that are potentially affected on the customer side of things is also relevant on the supplier side of things. It will be necessary to take stock of any of the following which is in place with suppliers and then contacts the relevant supplier to discuss the impact of the change of structure on these documents:

    • engagement letters
    • contracts
    • rental agreements
    • finance arrangements
    • scopes of works
    • tenders
    • supply agreements
    • credit agreements
    • director and personal guarantees
    • direct debit agreements
    • warranties
    • lease agreementsAgain, legal advice will be required in relation to these items.

      Of particular relevance is the final point above regarding lease agreements. If the old legal entity is a lessee under a lease, then steps may need to be taken with the lessor to have that lease re-assigned to the new legal entity. This may carry with it implications for any lease guarantees or rental bonds which are in existence.

      For recurring suppliers where none of the above documents and agreements are in place, it may still be worthwhile writing to them to let them know of the change in structure. Among other things, this communication provides an opportunity to pass on the full legal name of the new entity and its ABN so as to ensure that future Tax Invoices received from that supplier bear the correct details.

    To read the full article, please click the following link: https://drive.google.com/file/d/1FhYzNR8GS-bNeuTlRKqRQvcg8hA7hj-S/view?usp=sharing

ANNUAL & PERSONAL LEAVE – PART 2

ACCOUNTING FOR THE ACCRUAL OF LEAVE

Annual Leave

Annual leave accumulates from the first day of employment even when the employee must serve a probation period. Any unused amount of annual leave carries forward to the following year(s) and must be paid out on termination of employment.

In an accounting sense, the accrual of annual leave represents both an expense and liability to the employer.

Example

Johnson commenced his employment on 1 January 2021. After a week’s service, he had accrued annual leave of 2.92 hours which, at his hourly rate of $25 per hour, had a value of $73.

If Johnson’s employer wished to record this future obligation, then a journal would be required to record the increase in this liability as an expense, and the liability itself.

Account

Tax Code

Debit

Credit

Annual Leave (expense)

n/a

73

Provision for Annual Leave (liability)

n/a

73

Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

Personal Leave

Like annual leave, personal leave accumulates from the first day of employment even when the employee must serve a probation period. Any unused amount of personal leave carries forward to the following year(s).

However, in contrast to annual leave, personal leave is generally not a liability to the employer in an accounting sense. This is because it is not typically required to be paid out when an employee leaves their employer. Accordingly, the remainder of this edition of Bookkeepers Knowledge Base will focus on annual leave. In rare cases, an Award or other employment agreement may require personal leave to be paid out on termination; if this were the case, then a similar approach could be taken to that of annual leave.

Example

Johnson commenced his employment on 1 January 2021. After a week’s service, he had accrued personal leave of 1.46 hours which, at his hourly rate of $25 per hour, had a value of $36.50. The Award under which Johnson is employed requires that any unused personal leave owing to him be paid out on termination.

If Johnson’s employer wished to record this future obligation, then a journal would be required to record the increase in this liability as an expense, and the liability itself.

Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

Long Service Leave

Another common type of leave that accumulates from the first day of employment is that of Long Service Leave. This type of leave, however, is not in scope for either this edition or the previous edition, of Bookkeepers Knowledge Base and will be the subject of a future edition.

ACCOUNTING FOR THE TAKING OF LEAVE

The payment of annual leave and personal leave to an employee can be occasioned by:

  1. the employee taking a certain number of days of leave;
  2. the employee deciding to cash out a certain number of days of leave; or
  3. termination of employment.

In all of these cases, the payment of the leave forms part of the employee’s pay run and would be handled in the natural course of the payroll function. As a result, the payment of the leave will typically form part of wages expense and will be subject to PAYG-Withholding and superannuation as appropriate (as discussed in our previous edition).

Example

On 1 July 2021, Johnson takes a week’s annual leave. He is paid 38 hours at his hourly rate of $25 per hour, totaling $950. Assume PAYG-W of $200 is deducted and superannuation of $95 accrues.

The processing of Johnson’s pay run through the employer’s payroll module will have the following effect (albeit that it should occur automatically rather than being posted by way of a journal).

While the taking of the leave will (or at least should) reduce an employee’s leave balances within the employer’s payroll software, this reduction will not typically ow through to any leave provisions which may exist in the balance sheet. These leave provisions will typically have arisen from journals and will need to be adjusted by way of journals.

Example

Building on the previous example, the pay run which encompasses Johnson taking 38 hours of annual leave would have had the following impacts on his annual leave balance:

  • He would have accrued 2.92 hours of leave for the week (while he was on leave);
  • He would have used 38 hours of leave for the week,Accordingly, Johnson’s annual leave balance would have fallen by 35.08 hours for the week which, at his hourly rate of $25 per hour, has a value of $877.

    If Johnson’s employer wished to record this reduction in future obligation, then a journal would be required to record both the decrease in the liability (as a negative expense) and the decrease in the liability itself.

Account

Tax Code

Debit

Credit

Annual Leave (expense)

n/a

877

Provision for Annual Leave (liability)

n/a

877

Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

Recording Annual Leave Expense as it is taken

Some payroll systems provide the ability to allocate the taking of annual leave as it is taken. In practice, this would simply mean that the portion of a pay run which represents the taking of annual leave would be allocated by the payroll module directly to Annual Leave Expense (rather than to Wages expense). Ultimately, this comes down to how payroll categories are mapped to a chart of accounts within the relevant payroll software.

CALCULATING ACCRUED LEAVE

Thus far we have discussed the accounting principles surrounding the accrual of leave, but our examples have been simplistic and deliberately so.

We will now turn to the calculation of accrued leave in practice. The key elements to the calculation are:

  1. The number of hours of leave accrued;
  2. The gross hourly rate of pay;
  3. The extent to which “on-costs” are to be included.

Number of hours of leave accrued

Most payroll systems will quantify the number of hours of leave that an employee is entitled to at a point in time. This will be the starting point of any set of calculations. However, until such time that you are reliably assured that a client’s payroll system is operating correctly and accruing leave correctly, it can be a mistake to assume this calculation is correct.

The last thing you want to be doing is incorporating leave expenses and leave liabilities into financial statements which will be relied upon by the business owner/s and other third parties (e.g., banks, investors, ATO, etc), only to discover that your calculations were based on bad data to begin with.

There are numerous reasons why an employee’s leave balance in a payroll system could be incorrect:

  1. An employee may have been miscategorized as a casual (thereby not accruing leave) rather than as a part-timer or full-timer – or vice versa.
  2. An employee may be accruing leave at the wrong rate;
  3. An employee may have taken leave but rather than it being correctly tagged as such in a pay run, it was instead treated as a normal pay run (thereby creating the situation of an employee accruing further leave rather than using leave);
  4. An employee may have come across from another payroll system and no opening balance, or a wrong opening balance was entered.

We highly recommend that you conduct some sample testing to gain confidence that a client’s payroll system is indeed operating correctly and accruing leave correctly.

Having established that the accrued hours of leave within a payroll system can be relied upon, then the calculation of the accrued leave liability can be undertaken.

Gross hourly rate of pay

This gure should be readily obtainable from an employee’s pay records and will drive most pay run calculations. In most cases, it is the employee’s annual gross salary divided by the standard number of hours worked in a year.

Example

Tiger is a full-time employee working a standard work week of 38 hours. Her gross salary is $75,000. Tiger’s gross hourly rate of pay is calculated as follows:

Annual gross salary ÷ Standard hours per week ÷ 52 = $75,000 ÷ 38 ÷ 52
= $37.96

The extent to which “on-costs” are to be included.

Broadly, on-costs are additional costs incurred as a result of paying wages. Possible on-costs include:

• superannuation

  • leave loading
  • payroll tax
  • workers compensationIt is usually the case that all applicable on-costs are taken into account when quantifying the value of accrued leave.

    The extent to which on-costs are applicable will vary depending on the employer, their circumstances, and their jurisdiction. For example:

• for some employers, superannuation will be at the prevailing superannuation guarantee rate (currently 10%) while for other employers, it may be at a higher rate due to the application of a specific Award;

  • for some employers, leave loading will not apply as they are not employing any Award labor;
  • for some employers, the payroll tax is not applicable as they do not exceed the payroll tax threshold applicable to their jurisdiction;
  • workers’ compensation costs differ by employee and jurisdiction.Another nuance in this space is the fact that some on-costs (e.g., leave loading) apply whether the leave is being paid in the normal course of employment or as part of a termination. By contrast, some on-costs (e.g., superannuation) do not apply when leave is paid out as part of a termination (although once again, an Award may specify otherwise). Despite this, it is generally assumed that leave will be taken in the normal course of employment and, as a result, all applicable on-costs are included.

    Some payroll systems will contain reports which quantify the value of accrued leave, although anecdotally, it seems few have the capability to uplift the value by a stipulated set of on-costs.

Example

Tiger receives superannuation guarantee at the prevailing rate, currently 10%. Tiger’s employer is based in Tasmania and their level of wages places them in the 4% bracket for payroll tax. Tiger is entitled to leave loading at the rate of 17.5%. The WorkSafe Tasmania premium resulting from Tiger’s wage is 1.2%.

The on-costs applicable to Tiger’s wage are: = 10% + 4% + 17.5% + 1.2%
= 32.7%

Calculation

Having established each of the elements to the calculation of accrued leave, it is then a case of inserting them into the following formulae:

Leave liability = Hours of leave accrued x Gross rate of pay per hour x (100% + on-costs%)

Example

Building on the previous examples, assume Tiger has accrued 72 hours of annual leave. As stated above, her gross hourly rate of pay is $37.96 and her on-costs are 32.7%

Tiger’s accrued annual leave liability is calculated as: 72 x $37.96 x (100% + 32.7%)
= 72 x $37.96 x 132.7%
= $3,626.85

IMPLICATIONS FOR ACCOUNTS

Against the backdrop of the above examples, let’s examine a bit more closely the interaction between these accounting principles and a chart of accounts, and then in turn their positioning within pro t & loss statements and balance sheets.

Expense

When recording either an upwards or downwards movement in an accrued annual leave provision, the expense account used to record the increase or decrease is, in practice, typically titled one of the following:

  • “Annual Leave”
  • “Annual Leave Expense”
  • “Movement in Annual Leave Provision”.This expense account should be positioned in a pro t & loss statement in the same area as other labor-related expenses such as wages and superannuation.

    The best choice of the account name, and indeed the interpretation which one should give to the balance and workings of this expense account, will vary depending on exactly how it is used.

    Take for example a payroll system that provides an ability to allocate the taking of annual
    leave to a specific annual leave expense account. In this case, the taking of annual leave would be allocated by the payroll module directly to the Annual Leave Expense (rather than to the Wages expense). That same expense account would also be impacted by the upwards or downwards movement in the accrued annual leave liability, something which may be entered by way of a journal from time to time or through system-generated entries from the payroll module.

    In this case, the expense account is a pure reflection of the annual leave taken and/or accrued during a reporting period. This would favor the use of an account name of either “Annual Leave” or “Annual Leave Expense”.

    Contrast this with a payroll system that does not provide an ability to allocate the taking of annual leave to a specific expense account. In this case, the taking of annual leave would merely form part of the Wages expense. The expense account created with respect to annual leave would then only be impacted by the upwards or downwards movement in the accrued annual leave liability, something which would be entered by way of a journal from time to time.

    In this case, the expense account is not a pure reflection of the annual leave taken and/or accrued during a reporting period. Rather, it is merely a reflection of the extent to which the annual leave provision has moved – upwards or downwards – over a reporting period. This would favor the use of an account name of “Movement in Annual Leave Provision”.

    Liability

    The corresponding liability for accrued annual leave would typically be called “Provision for Annual Leave” and would be positioned in a balance sheet as a current liability. The rationale for its classification as a current liability stems from the fact that an employee could call on their annual leave at any time (subject to required notice periods). As a result, it meets the definition of a current liability which, broadly, is a financial obligation of a business due and payable within a year.

    HOW OFTEN SHOULD LEAVE BE ACCRUED?

    There are no hard and fast rules as to how often accrued annual leave should be recorded in the accounts.

    If your payroll system allocates the taking of annual leave to a specific annual Leave expense account, then it is arguably more important to record the movement in the accrued annual leave liability frequently. Without this, the annual leave expense account will harbor inaccuracies.

    If your payroll system does not allocate the taking of annual leave to a specific annual leave expense account, then it is less important to regularly record the movement in the accrued annual leave liability. Indeed, in this situation, there is no compulsion to record the accrued liability at all. For some business owners and their bookkeepers/accountants, a decision may be made that the

    exercise is not worth the effort. This will more likely be the case in businesses where:

    • overall labor costs are not material in amount;
    • overall labor costs are not significant when compared to non-labor costs;
    • employees tend not to accrue much leave;
    • the workforce is mainly or completely casual.If a decision is made to accrue annual leave in the accounts, then at a minimum, it should be done once per year, with 30 June being the logical date for most businesses.

      INITIAL ACCRUAL

      Thus far, we have discussed the approach to be taken when recording the increase or decrease in the accrued annual leave liability between two points in time. What then should be the approach when accrued annual leave liability is recorded for the first time in a set of accounts?

      Indeed, the same approach could be adopted, with the relevant expense and liability accounts used to record the full amount of the accrued annual leave liability at the end of the reporting period in question:

      Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

      The problem with this approach is that the accrued annual leave liability may have come to bear over the course of many years. If it is merely brought to account using the above journal entry, then the current reporting period bears the brunt of the full amount.

      This could lead to a misleading pro t & loss statement. Depending on the size of the accrued annual leave liability, anomalous outcomes could result such as:

      • an otherwise strong pro t being decimated;
      • a pro t being transformed into a loss;
      • an otherwise small loss being exacerbated.This could be problematic for several reasons:
      1. Financial analysis, ratios, and KPI reporting would be distorted, as would period-on-period comparisons of the same;
      2. Business owners or investors could be spooked;
      3. Banks could be concerned, especially if there are covenants that draw on reported pro ts for their calculation;
      4. Employee or shareholder bonuses that are based on profitability could be adversely impacted.

      A better way forward is to clearly delineate the movement in the accrued leave liability for the current reporting period from that of previous reporting periods. The amount relating to previous reporting periods can then be reported as an extraordinary expense below the main Net Profit line.

    Such an approach achieves the objective of bringing to account the accrued liability in full, but
    at least tempers the impact on the pro t & loss statement of the current reporting period. The distinction drawn by posting the prior period impact as an extraordinary item makes it easily annotated in financial reports, more readily identifiable so as to exclude it from financial analysis, and more easily explainable to third parties such as banks.

    Example

    Capstine Enterprises decides to begin accruing annual leave liability in its nancial accounts from 30 June 2021.

    As at 30 June 2021, the accrued annual leave liability is $125,265.

    To distinguish the movement in the accrued annual leave liability for the 2020/21 nancial year from that of previous years, the accrued annual leave liability as at 30 June 2020 is also calculated. This gure is $115,065.

    Based on these calculations, the accrued annual leave liability can be expressed in the following terms:

    • The amount relating to the 2020/21 nancial year: $10,200
    • The amount relating to previous nancial years: $115,065Capstine’s bookkeeper creates the following accounts in the chart of accounts:
    1. An expense account called “Movement in Annual Leave Provision” which is positioned in the overheads section of the pro t & loss statement adjacent to other labour expenses such as wages and superannuation;
    2. An expense account called “Prior period movement in Annual Leave Provision” is positioned as an extraordinary expense item in the pro t & loss statement, below the sub-total for “Net pro t before tax.”
    3. A current liability is called “Provision for Annual Leave.”

    The following journal is posted on 30 June 2021 as a result.

    Account

    Tax Code

    Debit

    Credit

    Movement in Annual Leave Provision (expense)

    n/a

    10,200

    Prior period movement in Annual Leave Provision (extraordinary expense)

    n/a

    115,065

    provision for Annual Leave (liability)

    n/a

    125,265

    Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

    INCOME TAX IMPLICATIONS

    The income tax implications of the accrual of annual leave are something that the client’s accountant or registered tax agent will deal with when preparing the income tax return for the entity concerned. Nonetheless, it is helpful to have at least a broad awareness of the implications.

    In short, annual leave only becomes income tax-deductible to the employer when it is paid. The corollary to this is that accrued annual leave is not income tax-deductible.

    What this means in practice is that the accountant or registered tax agent will exclude (or, to use accounting parlance, “add back”) the expense account which captures the movement in the annual leave provision.

    Depending on the reporting status of the entity and the significance of the accrued annual leave liability, the accountant or registered tax agent may choose to record a future income tax bene t as an asset in the accounts to reflect the future tax saving which will be realized when the accrued annual leave is eventually taken, and in turn becomes tax-deductible. This is known as “tax effect accounting” but it is beyond the scope of this publication to delve further into the same.

    WORKED EXAMPLE

    We will now take the principles discussed above and apply them to a more comprehensive example to show the accrual of an annual leave liability in a business with three employees.

    Example
    Stellar Pty Ltd has three employees, Rick, Madonna, and Bruce.

    The business owners favor an approach of recording the accrued annual leave liability in their financial accounts as they feel it provides them with a better picture of their overall position.

    When accruing the annual leave liability, on-costs of 11.5% are factored in, representing 10% superannuation guarantee levy and 1.5% workers compensation premiums. The staff is not employed under an Award and thus no annual leave loading applies. Fortunately for Stellar, they are not in payroll tax territory.

    At 30 June 2020, the nancial statements re ected an accrued annual leave liability of $21,450.26 made up as follows:

    At 30 June 2021, the following balances of accrued annual leave are taken from the payroll records:

    The accrued annual leave liability at 30 June 2021 is calculated as follows:

    Employee

    Accrued Annual Leave Liability

    Rick

    $12,345.10

    Madonna

    $754.23

    Bruce

    $8,350.90

    Employee

    Accrued Annual Leave Hours

    Rick

    277.01

    Madonna

    44.49

    Bruce

    190.00

    Employee

    Accrued Annual Leave Hours

    Gross Hourly Rate

    Accrued Annual Leave Liability

    Rick

    277.01

    $55

    $15,235.55

    Madonna

    44.49

    $28

    $1,245.72

    Bruce

    190.00

    $42

    $7,980.00

    Sub-total

    $24,461.27

    On-costs @ 11.5%

    $2,813.05

    Total

    $27,274.32

    As a result of these calculations, it can be said that there is an increasing movement in the annual leave provision for the year ended 30 June 2021, calculated as follows:

As a result of these calculations, it can be said that there is an increasing movement in the annual leave provision for the year ended 30 June 2021, calculated as follows:

Ending balance at 30/6/22

$23,457.90

Ending balance at 30/6/21

$27,274.32

Movement

($3,816.42)

To record this movement, a journal is posted on 30 June 2022, as per Journal 2 following this example. You will note that a negative (or credit) expense will arise in the pro t and loss statement as a result of this journal

  1. A negative (credit) expense of $3,816.42 will have the effect of increasing pro t;
  2. The accrued annual leave provision in the balance sheet will fall to $23,457.90

Journal 1: 30 June 2021

Journal 2: 30 June 2022

IMPLICATIONS FOR LEAVE BALANCES ON THE CHANGE OF OWNERSHIP OF A BUSINESS

When the ownership of business changes, there can be implications for the employer and employee in respect to leave entitlements.

First and foremost, however, it is necessary to examine whether there has actually been a change in the legal employment relationship. The best way to illustrate this is to consider the situation where a business is operated by a company. That business can change hands either by:

  1. The existing shareholders of the company transfer their shares to new shareholders (this is referred to as a sale of shares);
  2. Another legal entity, such as a different company, purchasing the business from the existing company (this is referred to as a sale of business);

In the first scenario, there is no change whatsoever to the employer-employee relationship. The same company that was the employer prior to the transfer of shares will continue to be the employer after the transfer of shares. All that has taken place here is a change in the underlying ownership of the employing entity.

By contrast, in the second scenario, there has been a change to the employer-employee relationship. The entity purchasing the business becomes the new employer and the entity selling the business ceases to be the employer. It is in this scenario that leaves entitlements must be dealt with as part of the sale, and from a bookkeeping standpoint, this will bring with it both accounting and payroll tasks.

Focussing then on this “sale of business scenario”:

in relation to annual leave entitlements, a number of possibilities exist:

  1. the new employer does not take over the leave balances; rather, the old employer paysout the employee’s accumulated leave.
  2. the new employer takes over all of the leave balances of the old employer (e.g., the new owners are re-employing all employees).
  3. the new employer takes over only some of the leave balances of the old employer, (e.g., the new owners are re-employing only some of the employees.)

in relation to personal and carer’s leave entitlements, the new employer will be required to take over the leave balances of the old employer.

Annual Leave entitlements paid out by the old employer

If some or all of the annual leave entitlements are being paid out by the old employer, then
the process is somewhat akin to the relevant employees merely taking all of their leave.
In practice, a final pay run would be performed to pay out to each employee their accrued annual leave entitlements. The payment would be a termination payment and may require a particular classification within the payroll software being used. Speci c PAYG-Withholding and superannuation requirements will apply, as detailed in the previous edition of Bookkeepers Knowledge Base.

Annual Leave and Personal and Carer’s leave entitlements are taken over by the new employer

In this case, the new employer is inheriting an actual liability (in the case of annual leave) and
a contingent liability (in the case of personal and carer’s leave). It is typically the case that the two parties to the sale will make an adjustment to the agreed price to reflect the liabilities
being assumed by the purchaser. There are no hard and fast rules on the methodology of this adjustment, and it will usually come down to a negotiation process between the parties and their professional advisors (e.g., accountants and lawyers). Some of the factors which will influence the extent of the adjustment include:

  1. The extent to which on-costs should be added to the annual leave liability being assumed;
  2. The valuation attributed to the personal and carer’s leave liability, given that there is no certainty that this liability will materialize;
  3. The extent to which the assumed leave liabilities should be discounted in recognition of the fact that the purchaser will enjoy a future tax deduction on the crystallization of that liability (i.e., when the leave is ultimately taken by the employer).

Whatever the agreed adjustment amount is, it effectively becomes an offset to the agreed price and would be entered by way of a journal entry:

Journal for the old employer:

Where n/a denotes that the entry is outside the scope of the GST system and not reportable for BAS purposes.

The old employer should then post the required journal to reduce their accrued leave liability to nil (using the methodology outlined earlier in this document).

Journal for the new employer:

The new employer should then post the required journal at the end of the reporting period to increase or decrease their accrued leave liability as required (using the methodology outlined earlier in this document).

The new employer could also decide whether they wished to carry the provision for personal leave as a liability or instead, merely write it off the Pro t & Loss Statement as a sundry income item of sorts. If they opted for the latter, the journal would be:

Overview for Annual & Personal Leave – Part 1

The many bookkeepers who are in charge of payroll for their clients will typically also preside over the leave system for the employees of those clients. In this first of a two-part series, this edition examines the broad rules around annual leave and personal leave.

In our next edition we will cover off on how to account for these types of leave.

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How to deal with property transactions, trust accounts at EOFY ?

Many bookkeepers are no doubt familiar with real estate trust accounts, whether you act for a real estate agency or a landlord.

 

For background, in Australia, there are laws to protect how property agents handle the money they receive on behalf of their clients (landlords).

With financial year-end coming up, recently we had a question come to us around investor property income held in a Real Estate Agent Trust Account on 30th June 2021

If, on 30th June 2021, a Property Owner has income in the Real Estate Trust Account and has not received the funds into his bank account, then does the Owner need to include those funds as income for the 2021 Financial Year. Or if the funds are received into the Owners Bank Account on 1st July 2021, are these funds to be included in the 2022 year?

With the ATO now data matching real estate property management software, the above issue is quite pertinent.

In summary, the answer to your question is not clear-cut but rather it hinges on:

  • each state’s relevant legislation which, here in Qld, is a combination of the Trust Accounts Act (1973) and the Auctioneers and Agents Act (1971), and
  • the specific terms of the agreement between the two parties (in the case of the letting out of real property to which your question refers, the two parties would be the tenant and the landlord/rental property owner who would have a lease agreement which establishes the terms of the lease)

The leading issue is that any Trust money must remain in an agent’s trust account until the relevant transaction is finalised and the appropriate person is entitled to the application of the trust funds.

A ‘finalised transaction’ is one where the entitlement to trust money shifts from the payer (tenant) to the payee (landlord, other related creditors, agent themselves for commission, etc) and in most instances, the transfer date or event is specified in the lease or contract between the two parties.

By way of example, we can consider the following as to when a transaction typically “finalises”:

    • A rental bond usually finalises when the contract lease agreement between the tenant and the landlord is signed and comes into law. (Once finalised, the bond must be paid to the RTA)
    • A deposit or any rent paid for letting accommodation that is non-refundable or that becomes non-refundable upon a certain time or event occurring, finalises when it is due under the letting agreement or if conditional on a timeframe, when that time or event occurs. This would be the case you are referring to. Therefore, if a lease specified, for example, that an amount is to be paid weekly in advance on a set date each week, then it is those individual dates for which each individual transaction is considered a finalised transaction. Therefore, if a person were for example to pay 4 weeks rent in advance, then on each individual transaction finalisation that enables the agent to clear a weeks rent and to account to a landlord, these would be considered the landlord’s funds at that finalisation time, even though they may not have been physically paid out to the landlord. So whilst not paid out of a trust account it would be an entitlement of the landlord for that portion of the prepaid rent, but not the full amount until each finalisation event occurs.

      • A deposit for a property sale, which is finalised on the date when settlement occurs or the date when the contract falls through….so any deposits held can be accounted to for the stakeholder (which might be the purchaser if the contract falls through and not settled).

      The aforementioned Auctioneers and Agent Act (1971) then specifies that once a transaction is finalised, the agent may draw money from their trust account to pay the person entitled to the money—less any authorised transaction fees or expenses—or to another person nominated in writing by the person entitled to it.

      Again, any “authorised fees and expenses” are those specified in the signed appointment to act agreement (whether that be the rental agency agreement or the agreement to act if it was a property sale)

      In terms of the actual physical payment where the presently entitled person asks an agent for their money, it must be paid within 14 days of the request. Where the presently entitled person does not ask in writing for the money to be paid, it must be paid within 42 days after the transaction is finalised, however there is no question to the entitlement of the funds under the trust accounts act it is merely held in trust to the person presently entitled to it.

      In summary, turning back to your question, it very much depends on the facts of each case, when laid against the relevant jurisdiction’s legislative regime, and the agreement between the parties – in this case being the landlord and tenant – in particular around when finalisation events occur under that agreement.

       

      Therefore, from an income tax perspective, you would need to assess if any of the monies that are sitting in an agents trust account at the end of a financial year is a “finalised transaction” and if it is, then it would be deemed to be income of the landlord in that year, even though it may not have been physically paid to the landlord by year end.

BAS Lodgement Due Dates 2020-21

Lodgement Dates – the general rule

The general position with regard to due dates is that from the end of the respective periods:

  • quarterly returns must be lodged within 28 days, and
  • monthly returns must be lodged within 21 days

* Quarterly returns with an original due date of 28th lodged electronically generally qualify for an automatic 2-week extension of time. Eligibility conditions exclude large businesses and monthly lodgers – with the exception of small businesses lodging monthly with a tax agent – the December due date of 21 January is extended to 21 February.

* Penalties are normally automatically calculated for late lodgment.

 

BAS Due Dates 2020-21

2020-21 BAS quarterly return periods Due Date before 
4th Quarter: (2019-20)
1 April to 30 June 2020
Standard due date 28 July 2020
Agent: 25 August 2020
1st Quarter:
1 July to 30 Sept 2020
Standard due date 28 Oct 2020
Agent: 25 November 2020
2nd Quarter:
1 October to 31 Dec 2020
28 February 2021
3rd Quarter:
1 January to 31 March 2021
Standard due date 28 April 2021
Agent: 26 May 2021
4th Quarter:
1 April to 30 June 2021
Standard due date 28 July 2020
Agent: 25 August 2021 (to be confirmed)

Two-week lodgment concession – terms and conditions

You may qualify for an extra two weeks to lodge and pay your quarterly activity statements if you receive and lodge them online.

This concession:

  • is ongoing
  • allows you to lodge your quarterly activity statement two weeks after the original due date
  • applies to activity statements for the standard quarters ending 30 September, 31 March and 30 June which have an original due date of the 28th of the month, following the end of the quarter – that is, quarters one, three and four (quarter two activity statement lodgers already have eight weeks to lodge)
  • will be visible online once the activity statement generates and dispatches.
BAS: Two-week lodgement concession Due Date before 
4th Quarter: (2019-20)
1 April to 30 June 2020
Due 11 August 2020
1st Quarter:
1 July to 30 Sept 2020
Due 11 November 2020
2nd Quarter:
1 October to 31 Dec 2020
Due 28 February 2021
3rd Quarter:
1 January to 31 March 2021
Due 12 May 2021

 

SG Due Dates

Please note that Superannuation Guarantee payments are due on the same date.

Superannuation Guarantee Quarter Superannuation Guarantee Due Dates
1 July – 30 September 28 October
1 October – 31 December 28 January
1 January – 31 March 28 April
1 April – 30 June 28 July

JobKeeper from 28 September 2020

With the first part of JobKeeper ending 27 September 2020, businesses that require further support and businesses who may not have been eligible yet will need to reassess their eligibility and show an actual decline in turnover.

To receive JobKeeper from 28th September 2020, eligible employers will need to assess their decline in turnover with reference to actual GST turnover for the September 2020 quarter (to receive JobKeeper payments between 28th September to 3rd January 2021), and again for the December 2020 quarter (for payments between 4th January 2021 to 28th March 2021), when compared to the same period in 2019.

From 28th September 2020, the JobKeeper payment rate will reduce and split into a higher and lower rate. This is based on the number of hours that the employee worked in a specific 28 day period prior to 1st March 2020 or 1st July 2020.

When considering JobKeeper payments from 28th September 2020, there are three questions that will need to be assessed:

  1.  Is my business eligible?
  2. Am I and/or my employees eligible? and
  3. What JobKeeper rate applies?

Further information regarding these questions can be found by contacting Ling Ye at Bookkeeping City on 03 99880077.

 

Claiming Work From Home Expenses

The COVID-19 partial shutdown has resulted in many people working from home, and for many people the first time for an extended period.

If you are an employee working from home you may be entitled to claim running expenses such as those listed in the table below.

For business owners, if your home is your place of business and you have an area that is set aside exclusively for business activities (it may have signage, client meeting area etc. as well as your computing equipment, client files and other office furniture) and is not used for private purposes you may be able to claim both running and occupancy expenses.

Alternatively, if you conduct work from home but do not have a dedicated area set aside exclusively for work purposes (e.g. just a spare room which your family treats as a computer room or you work from the lounge room for instance) you are further restricted in the deductions you can claim as per the following ATO table:

Links for you to download the article and the clear table: Claiming Work From Home Expenses 

The indicators used by the ATO of your home being a “place of business” are fairly arduous. You would need to show that there is an absence of an alternative place for conducting income producing activities and that the area was set aside exclusively for business purposes. This would tend to mean that you would need to evidence that most, if not all, of the work performed by you under your engagements was performed at home rather than at the client’s premises or commercial premises.

In respect of depreciation of home office furniture and running costs listed above, the ATO applies some useful administrative rules which allow either a:

  • Reasonable portion based on a reasonable test of the actual expenses incurred,

or

  • A flat rate of 80 cents per hour (this rate was lifted in April 2020 from 52 cents per hour). This flat rate includes heating, cooling, lighting, cleaning and the decline in value of furniture. Therefore, where you are using the flat rate, you can’t also claim depreciation on office furniture however it can still be separately claimed for office equipment.

If applying the reasonable portion based on a reasonable test of the actual expenses incurred, receipts will be needed together with a detailed explanation of the basis of apportionment such as floor space used for work purposes relative to total work space in the house.

On the other hand, if you are using the 80 cents per hour flat rate method, a record can be kept of hours worked from home or a diary should be maintained for at least four representative weeks to record the amount of time the home is used for work purposes. By way of illustration, if as a result of COVID-19, 30 hours of your working week is conducted at home for 10 weeks in the year to 30 June 2020,$240 can be claimed as a deduction (30 x 10 x 0.80).

Administrative short-cuts also apply to mobile phone usage, with a standard $50 fixed deduction per year being allowed. Otherwise, an apportioned deduction based on actual expenses is required. This can be quite involved, requiring a diary to be kept for a representative four-week period.

 Warning:

It should also be noted that if you do claim occupancy costs, upon the eventual disposal of your home, the capital gains tax exemption that normally applies to the sale of one’s own home will be affected.

The portion of your home that is designated as a “place of business” coupled with the period of ownership where that has been the case, will be used to determine the percentage of any capital gain that will be taxable (as opposed to being exempt).

Tips on applying for JobKeeper Payment

Employers will receive a standard payment of $1,500 per fortnight per eligible employee. Every eligible employee must receive at least $1,500 per fortnight from this business.

Timing of Payment

The first payments will be received by eligible businesses in the first week of May from the ATO, as monthly arrears. Eligible businesses can begin distributing the JobKeeper Payment immediately and will be reimbursed from the first week of May.

Eligible employers – min 30% reduction in revenue

Eligible employers will be those with annual turnover of less than $1bn who self-assess that have a reduction in revenue of 30% or more, relative to a comparable period a year ago (of at least a month).

Employers with an annual turnover of $1bn or more would be required to demonstrate a reduction in revenue of 50% or more to be eligible. Businesses subject to the Major Bank Levy will not be eligible.

Eligible employers include companies, partnerships, trusts and sole traders. Not-for-profit entities, including charities, are also be eligible. Eligible employers who have stood down their employees before the commencement of this scheme will be able to participate, providing they re-engage those employees who were on their books at 1 March.

The key for employers wishing to access the per-employee payment, is to stay connected with your employees – whether that entails them continuing to work their normal hours from home, being cut back to part-time, taking paid annual leave or unpaid leave, being stood down etc. Without that employment connection, eligibility is not met.

Employers must elect to participate in the scheme. They will need to register their interest and provide supporting information demonstrating a downturn in their business. The full application process will be made clear once legislation has passed. In addition, employers must report the number of eligible employees employed by the business on a monthly basis.

Eligible employees

Full time and part time employees, including stood down employees, are eligible to receive the JobKeeper Payment. Where a casual employee has been with their employer for at least the previous 12 months, they will also be eligible for the payment.

An employee will only be eligible to receive the payment from one employer. The employee will need to notify their primary employer to claim the JobKeeper Payment on their behalf.

Eligible employees include Australian residents, NZ citizens in Australia who hold a subclass 444 special category visa, and migrants who are eligible for JobSeeker Payment or Youth Allowance (Other).

Self-employed individuals are also eligible to receive the JobKeeper Payment, where they have suffered or expect to suffer a 30% decline in turnover relative to a comparable prior period (of at least a month). Employees that are re-engaged by a business that was their employer on 1 March 2020 will also be eligible.

How to enrol and apply ?

The ATO last night revealed the eight steps that businesses or their advisors have to take to enrol for JobKeeper:

For more information, visit the ATO website

  • Step 1 – Register your or your clients’ interest and subscribe for JobKeeper payment updates
  • Step 2 – Check you and your employees or those of your clients meet the eligibility requirements.
  • Step 3 – Continue to pay at least $1,500 to each eligible employee per JobKeeper fortnight (the first JobKeeper fortnight is the period from 30 March to 12 April).
  • Step 4 – Notify eligible employees that you are intending to claim the JobKeeper payment on their behalf and check they aren’t claiming JobKeeper payment through another employer or have nominated through another business.
  • Step 5 – Send the JobKeeper employee nomination notice to your nominated employees to complete and return to you by the end of April if you plan to claim JobKeeper payment for April. Keep it on file and provide a copy to your registered tax agent if you are using one.
  • Step 6 – From 20 April 2020, you can enrol clients or they can enrol themselves with the ATO for the JobKeeper payment using OFSA or the Business Portal respectively and authenticate with myGovID. You must do this by the end of April to claim JobKeeper payments for April.
  • Step 7 – In the online form, provide your bank details and indicate if you are claiming an entitlement based on business participation, for example if you are a sole trader.
  • Step 8 – Specify the estimated number of employees who will be eligible for the first JobKeeper fortnight (30 March – 12 April) and the second JobKeeper fortnight (13 April – 26 April).

Stimulus Package in response to Covid-19

The following is a broad summary of the key aspects of the Federal Government’s stimulus package in response to the Coronavirus, as recently announced and enacted. The summary is based on information currently available on the Treasury website (refer to “Economic response to the Coronavirus”), as well as various Bills introduced into Parliament (and passed by both Houses of Parliament) on 23 March 2020 (which includes the Coronavirus Economic Response Package Omnibus Bill 2020), to give effect to the Government’s stimulus package.

  1. Income support for individuals
  2. Early access to superannuation benefits
  3. Reducing the minimum drawdown amounts for superannuation pensions
  4. Reducing the social security deeming rates
  5. Cash flow assistance for businesses
  6. Increasing the instant write-off threshold for business assets
  7. Backing business investment – accelerating depreciation deductions for new assets

To read the further information, check out this article

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