What’s new 21-22: Important changes for the new financial year
As July 1st approaches, it is vital that business owners and taxpayers alike, are aware of the key changes coming for the new financial year. The below information is likely to affect us all, whether we want it to or not, so please do read carefully.
Director Identification Number (DIN) legislation
The new Director Identification Number (DIN) system will see all directors confirming their identity, with a unique identifier for each person who consents to being a director.
This legislation, passed without amendment in June 2020, will be operated by the ATO. Its core purpose is to improve transactional activity between businesses and the government and to increase the accountability of corporations.
A few main points to be aware of:
- The DIN system will be rolled out with a vision to create a central Commonwealth Business Registry.
- The legislation aims to combat “phoenix activity” where companies are liquidated or abandoned to deliberately dodge debts and/or liabilities.
- A DIN will stay with a director throughout their lifetime, even if they cease to be a director in the future.
“A DIN with stay with a director throughout their lifetime, even if they cease to be a director in the future”
Changes in the Superannuation Guarantee Rate
From the 1st of July 2021, the Super Guarantee Rate will rise from 9.5% to 10%.
The upcoming rates changes are as follows:
| 1st July 2021 | 10.00% |
| 1st July 2022 | 10.50% |
| 1st July 2023 | 11.00% |
| 1st July 2024 | 11.50% |
| 1st July 2025 | 12.00% |
When reviewing and planning staffing costs please ensure you include these rate changes as they are going to have a significant impact on the bottom line and cash flow for many small businesses.
By now, if you are an employer, you should be using software to process payroll to ensure you are STP compliant. Your payroll software should automatically update to incorporate the changes however we recommend checking when processing your first pay cycle for 2022 particularly if not using one of the major providers such as Xero, MYOB or QuickBooks.
As part of the 2021–22 federal Budget, the Australian Government announced it will remove the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay (although this measure is not yet law).
Award changes as of July 1st
The Fair Work Commission has announced a 2.5% increase to the national minimum wage. This will also apply to all award wages, with the award increase happening in 3 different stages. The first change is 1 July 2021. For more information CLICK HERE.
“From the 1st of July 2021, the Super Guarantee Rate will rise from 9.5% to 10%.”
ATO is chasing unpaid and late paid super
With the introduction of superannuation clearing houses and Single Touch Payroll (STP), the ATO has increased data matching capabilities and we are seeing the ATO being more pro-active in contacting employers about unpaid super.
What happens if super remains unpaid or you do not pay super or lodge a SGC statement on time:
- Previously exempt earnings (like overtime) may become subject to SGC
- Interest accrues until the SGC statement is lodged
- Part 7 penalty can be as high as 200% of the SGC payable
- SGC is not tax-deductible
- Super paid late is not tax-deductible
- You may be held personally liable for unpaid super & SGC.
This is a significant risk for employers not paying superannuation on time or not at all. Take action now and make sure you are complying with your superannuation obligations.
WorkCover Queensland changes
Get ready to renew your accident insurance policy from the 1st of July, 2021.
If you employ workers in Queensland, it’s time to start preparing to renew your WorkCover accident insurance policy. Find out who you need to cover and what payments to include in your wages declaration. Make sure your contact details with us are up-to-date so you don’t miss our notifications. Also, please be sure to cancel your policy now if you’re no longer employing.
Please CLICK HERE for more information.
Although these are seemingly small changes, we know they can have big consequences on small businesses. If you’re feeling overwhelmed with these changes, or any other aspects of your business accounting, please feel free to get into contact with us. We genuinely care about you and your success, and will do all we can to support you.
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