Planning ahead for the New Financial Year

Tuesday June 21, 2022

The effects of staff shortages, increased business costs, supply chain issues and loss of revenue are still being felt in the wake of the COVID-19 pandemic.

A recent update from the Australian Bureau of Statistics notes that over half of all businesses are operating with increased business costs.

So while this is front of mind, it’s a good opportunity to review, plan and prioritise your business goals for the new financial year as well as ensuring you’re adhering to your obligations as an employer.

Below are some things to consider as you plan for the Financial Year 22/23:

National minimum wage increase

Minimum wages will increase by at least $40 a week for full time employees, with the hourly pay rate lifting from $20.33 to $21.38, the Fair Work Commission has ruled.

The commission handed down its decision in the annual wage review on 15 June, granting a 5.2% increase to the national minimum wage and 4.6% for award minimums and will come into effect from 1 July for the majority of Award employees but for the industries most affected by covid the increases will happen from 1 October.

For more information, visit Fair Work.

Become familiar with possible incentives

The Australian small business sector received several mentions in the Federal Government’s 2022/23 budget, with some tax cuts and other support measures slated to come into effect from 1 July.

Below are some key funding extensions that have been granted for the following support services:

  • Boosting Apprenticeship Commencement wage subsidy is extended by three months to 30 June 2022.
  • NewAccess for Small Business Owners: mental health support for small business owners
  • Small Business Debt Helpline: free financial counselling for business owners
  • The Australian Small Business and Family Enterprise Ombudsman: this service provides business planning, capacity building and financial literacy training.

Get payroll processes in shape

Most businesses should already be familiar with the STP (Single Touch Payroll) system, including Phase 2, which was rolled out in January 2022.

Designed to streamline the reporting of employee pay, tax withheld and superannuation to the ATO via accounting software such as MYOB.

Still unsure about STP? Set up a meeting with your accountant.

Take upcoming super changes into account

Compulsory Employer Superannuation Guarantee (SG) payments are scheduled to increase from 10% to 10.5% on 1 July 2022. It is recommended that businesses do the following before 1 July:

  1. Review your company’s employment contracts to determine how your employees pay is calculated and how to recalculate the amount of superannuation.
  2. If you specify superannuation in your employment contracts increase this amount to 10.5% after 1 July.
  3. Issue all employees with a variation of employment contract letter outlining the new superannuation changes.
  4. Adjust your payroll systems to pay the increased amount to eligible employees.
  5. Use this opportunity to make sure your company is compliant across all aspect of payroll including award interpretation and leave calculations.

Casual Conversion

If your business employs 15 or more people, you have an obligation to offer casual conversion to eligible casual employees unless there are reasonable grounds not to offer conversion.

Eligible casual employees must meet the following criteria:

  • they must be employed for at least 12 months; and
  • they must have worked a regular pattern of hours in the last 6 months; and
  • these hours could be worked on an ongoing basis without significant adjustment

It is important to bear in mind that there are penalties for non-compliance. It is imperative that employers understand their obligations and have procedures in place to ensure they are compliant.

Small businesses with fewer than 15 employees are not obligated to offer casual conversion to their employees however, they should bear in mind that an employee has the right to request conversion.

It is important to remember that as an employer you can refuse an employees request or decide not to make an offer of conversion on reasonable grounds.

As always, we are here to help! So if you’re wondering if you have reasonable grounds to not offer casual conversion, or you would like to level-up your HR support, please contact your local HR Dept office.

 

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