It’s almost 1 July, which means a new financial year, new things you need to start/stop doing to stay compliant, and a new opportunity to change the way you do business now to drive an even better 2020. 1 July brings in a raft of new legislative compliance changes that you need to be on top of. There are new rules for paying and reporting, as well as new rates of pay and tax for specific business situations. We’ve summarised all of the changes that may impact your payroll, business or workforce below.
Single Touch Payroll (STP)
The big one that everyone’s heard of (maybe), but more than an estimated 30% of Australian businesses have done nothing about, is Single Touch Payroll (STP). STP applies to all Australian employers from 1 July 2019. All employers – from 1 employee up – must now report using STP.
What is STP?
STP is an ATO reporting initiative designed to provide simpler, lower cost options for reporting payroll activity. The STP initiative delivers a new reporting standard to streamline existing PAYG, Superannuation and Tax reporting, which the ATO hopes will reduce costs and complexity while providing greater visibility of non-compliance so the ATO can assist/intervene for employers.
STP requires that when employers pay their staff, the employees’ salary or wages and PAYG withholding amounts are automatically reported to the ATO as part of payroll processing. In the case of microbusinesses, there are options to report STP less frequently – for example, quarterly via your Accountant if you don’t have STP-enabled software.
If you’re not sure about STP or how it applies to your business, check out our STP overview with everything you need to know to get compliant here.
New Pay Rates
A new minimum wage applies from 1 July 2019. Employees who get their pay rates from the national minimum wage – a modern award, or a registered agreement (in some cases) – will be entitled to a pay increase.
The increase won’t affect employees who are already getting paid more than the new minimum wages. To find out what the new wage rates are, or whether they apply to your employees, visit the Fair Work Ombudsman website for more information.
New rates apply from the first full pay period commencing on or after 1 July 2019. So, if your pay week is from Wednesday to Tuesday, the new rates take effect on Wednesday 3 July.
Tax and Reporting Changes
While STP is the big news, the ATO has also been busy with a raft of additional changes that will impact you or your employees from 1 July 2019.
Private health insurance statements
From 1 July 2019, health insurers are no longer required to send private health insurance statements. Previously they were required to send statements by 15 July each year, it is now optional to send this information. If you have private health insurance, this statement is used to calculate private health insurance rebates taxpayers are entitled to, and the Medicare levy surcharge, if applicable.
Private health insurance information will be available in the pre-fill report, usually by mid-August. If it is not populated by then, taxpayers may need to request a statement from their health insurer.
Income statements (formerly ‘Payment Summaries’)
If an employer reports through Single Touch Payroll they are not required to provide an Income Statement (formerly known as a ‘Payment Summary’) to their employees.
Not issuing Incomes Statements directly to employees, and the changes your employees need to be aware of, are described in-depth by the ATO in this handy Factsheet.
First home super saver scheme
If an employee requested the release of an amount under the First home super saver (FHSS) scheme during the 2018–19 income year, there are some changes to their tax declaration for 2019. They must include in their 2019 tax return:
- any assessable FHSS amount;
- the tax withheld amount, and;
- They will receive a payment summary from us showing the assessable FHSS amount and tax withheld.
If they requested a release during the 2018–19 income year, they must include the amount in their 2019 tax return, even if they did not receive the amount until after 30 June 2019. More info about the scheme is available here.
More inspo for your new FY
Like the first of January, the first of July is a time to look forward and not back. It’s time to examine your business with fresh eyes and come up with the changes needed to make improvements.
We’ve published a bunch of articles with tips to maximise your EOFY opportunities to start your new year right and build a better business.
Here are a couple of our faves:
- Improving your financial year forecasting – https://www.aurion.com/improving-your-financial-year-forecasting
- Your EOFY Resolutions (from 2018, but still relevant now!) – https://www.aurion.com/your-eofy-resolutions/
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