Import updates before this festive season
Important updates for individuals and businesses
This newsletter includes a range of information, including:
Can the JobMaker Hiring Credit Scheme help your business?
JobKeeper Payment extension 2 starts from Monday 4 January 2021
NSW Payroll tax rate reduction and increase to threshold for 2020/21
Pensions for 2020/21 – Reduction in the legislated minimum pension by 50% and reminder to pay before 30 June
Age increases to 67 for the work test and superannuation contributions
7 most common Bookkeeping mistakes that are costing you money
Increasing the maximum age of dependents for private health insurance to 31 years
Know the differences between employees and independent contractors
Upcoming public holidays and employee entitlements
A Christmas message from Bush & Campbell
Can the JobMaker Hiring Credit Scheme help your business?
The JobMaker Hiring Credit scheme is an incentive for businesses to employ additional young job seekers aged 16–35 years and registrations are now open!
Eligible employers can access the JobMaker Hiring Credit for each eligible additional employee they hire between 7 October 2020 and 6 October 2021 provided the employer and the employee meet the associated eligibility criteria.:
- Employer eligibility criteria
- Employee eligibility criteria
You could receive up to $200/week if the employee is between 16 and 29 years old (inclusive) or up to $100 a week if the employee was between 30 and 35 years old (inclusive). Estimate the payment you may receive by using the ATO's JobMaker Hiring Credit payment estimator.
JobKeeper Payment extension 2 starts from Monday 4th January 2021
The second JobKeeper Payment extension starts from 4 January 2021 and covers the JobKeeper fortnights between Monday 4 January 2021 and Sunday 28 March 2021.
It means:
If you are eligible for JobKeeper extension 2 you will need to complete a new decline in turnover test. This eligibility criteria has eased from September 28 2020 and business only need to demonstrate a decline in turnover over one quarter.
The payment rates for your eligible employees will change from January 4 2021. Employees working a minimum of 20 hours per week will have their payment reduced to $1,000 per fortnight, and employees working less than 20 hours per week will have their payment reduced to $650 per fortnight.
If you are new to JobKeeper you can enrol in the program to participate in the remaining fortnights.
If you are a business that was receiving JobKeeper payments but are no longer eligible under the extension, you need to follow the rules around legacy employers for any changes to employee workload. Find out more here.
To support you over December and January the ATO have extended some reporting dates.
For JobKeeper fortnight 20 (Monday 21 December 2020 to Sunday 3 January 2021) you will have until the end of Monday 4 January 2021 to pay your employees (meet the wage condition) and business monthly declarations for JobKeeper fortnights 18, 19 and 20 are now due 28 January 2021.
For JobKeeper fortnights 21 and 22 (starting Monday 4 January 2021 and Monday 18 January 2021) you will have until Sunday 31 January 2021 to meet the wage condition for your eligible employees.
This is to make sure that you have paid your eligible employees before claiming JobKeeper payments in your February monthly business declarations.
NSW Payroll tax rate reduction and increase to threshold for 2020/21
The NSW Government has announced a reduction in the payroll tax rate to 4.85% for the 2020/21 and 2021/22 financial years.
The threshold has also increased to $1.2 million for the 2020/21 and subsequent financial years. These changes apply retrospectively from 1 July 2020.
Pensions for 2020/21
The Government is temporarily reducing superannuation minimum drawdown requirements for account-based pensions and transition to retirement pensions, by 50% for 2019-20 and 2020-21.
This measure will benefit retirees by reducing the need to sell investment assets to fund minimum drawdown requirements.
If you have already withdrawn the minimum pension amount in 2020, or amounts in excess of the minimum pension, you are not eligible to put the excess withdrawn amount back into super under these measures.
If you require the pension drawdowns (at their historic rates) to fund lifestyle and living costs, then existing pension drawdowns can be maintained.
This pension reduction measure will also be in place for next financial year. To calculate your new minimum pension for the current financial year, the minimum pension previously communicated to you at completion of your 2019 superannuation fund can be halved.
If a pension fund fails to physically pay sufficient pensions to meet its minimum obligations, the fund will not be entitled to the tax exemption (i.e. it will lose its tax free income status). Other than in specific circumstances, it is not acceptable for the fund to accrue any pension shortfall in its financial statements.
Electronic transfers need to clear the bank account on or before 30 June to be considered pensions for that year.
Age increases to 67 for the work test and superannuation contributions
In June 2020, parliament increased the age where the work test would be required in order to make super contributions.
From 1 July 2020 an individual can make super contributions without passing the work test up to and including age 67. If super contributions are made in the 67th year, after the 67th birthday, then the work test must still be passed (just like in the past for those that are 65).
Bring forward non-concessional rules (eg non-concessional over $100k) have NOT been extended to age 67 as yet. This is expected but currently not law.
7 most common Bookkeeping mistakes that are costing you money
Bookkeeping mistakes that can cost you money, here are the 7 most common to be careful of!
Improper or poor record keeping
Improperly categorising expenses
Not reconciling bank accounts
Neglecting sales tax
Not classifying employees correctly
Neglecting to track reimbursable expenses
Wasting too much time
Staying on top of your bookkeeping can be a real struggle that can cost your business time and money. Bush & Campbell can help you save on both.
Let us help you with:
Bank reconciliations
Invoicing customers and month end statements
Entering supplier invoices
Payroll processing including PAYG withholding and superannuation obligations
Software packages including Xero, MYOB, Reckon and Phoenix
At Bush & Campbell, we've been crunching numbers big and small for more than 100 years - let us know how we can help you to lighten your workload and take this stress out of your business!
Increase to maximum age for dependants on private health insurance to 31 years
The Government is providing $19.5 million to improve access to and affordability of private health insurance.
From 1 April 2021, the Government is increasing the maximum age of dependants allowed under private health insurance policies from 24 to 31 years and removing the age limit for dependants with disability.
The Government is also enhancing the Medical Costs Finder website, increasing transparency of out-of-pocket costs and assisting consumers to choose a specialist.
Know the differences between employees and independent contractors
It’s important for employers and business owners to be confident about how they have classified their working relationship with the person they’ve hired. This is because they have different obligations to the person depending on whether the person is a contractor or an employee.
Whether or not the person is a contractor, or an employee is based on the objective nature of the relationship, not what the business owner calls the arrangement. For example, a worker isn’t automatically classed as an independent contractor just because they’ve got an ABN.
There are some common indicators that can help you tell an employee from an independent contractor. Learn the differences before you engage someone as a contractor.
Upcoming public holidays and employee entitlements
Believe it or not, Christmas is less than 3 weeks away. Whether you’re continuing trade or shutting down over the end of year period, you’ll need to be across public holiday entitlements for your employees.
With Boxing Day falling on a Saturday this year, most states and territories will get a substitute public holiday or an additional public holiday on the following Monday. Check upcoming dates and penalty rates on Fair Work Ombudsman’s public holiday info page.
Christmas shutdown dates
We know everyone is looking forward to a break after what has been an unprecedented year, and we hope all of our clients enjoy a relaxing holiday season.
Reminder all Bush & Campbell offices will be closed from 12pm Thursday 24th December 2020, and reopening 8:30am Monday 4th January 2021.