Considerations & Changes for the 2023 Financial Year
With the New Financial Year having started on 1st July 2022, there are new and updated changes and obligations for employers. Please see below a comprehensive list that may affect your business –
So What is Changing?
End of Year Payroll Cut Off
Whichever day you normally pay your employees – continue to pay on that date.
Do not try to pay your employees earlier (i.e. 30th June) as this may negatively impact their income tax calculations for the financial year.
If your normal pay event occurs on the 1st July – this is the first payment in the new financial year.
Superannuation Guarantee (SG) Payment
The next quarterly due date for SG payment is 28th July 2022.
Superannuation Guarantee (SG) Rate
Increasing from 10% to 10.5% from the first pay event in the new financial year. (The rate increments 0.5% each year to 12.0%)
Abolishment of the $450 Threshold for SG ($350 if in Hospitality Industry)
SG is now payable on the first $ earnt.
For under 18 years employees. They must work more than 30 hours in one week.
Superannuation Work Test for under 75
Will no longer have to meet work test to make or receive contributions
Fair Work Minimum Wage Increases
Where Fair Work (FWO) advise new minimum wages, it applies to the first full week of July on total hours.
FWO advise new minimum wage to increase by 5.2%. The new hourly rate is $21.38 per hour. $812.44 per week, based on 38 hours per week.
Award minimum wages will increase by 4.6%, which is subject to a minimum increase for award classifications of $40 per week and based on a 38-hour week for a full-time employee.
Check with your Bookkeeper or HR Department regarding the Award to ensure your business is compliant with any other employment condition changes and to ensure your business is on the correct award.
Awards – Fair Work Ombudsman
Redundancy Tax Free Lump Sum Threshold
Increases to $11,591.00 +$5,797.00 for each completed year of service.
Employment Termination Payment (ETP) Cap Threshold
Increases to $230,000.00 (Life & Death).
Whole of Income WOI remains $180,000.00.
Payroll Tax (WA only)
Quarterly payroll tax return lodgement threshold changes:
Increases from $100,000 to $150,000.
Payroll with annual liability of up to $150,000 will have option to pay quarterly rather than monthly.
Living Away from Home Allowance (LAFHA)
This changes in March each year.
Check with your Bookkeeper to ensure the correct amount is being paid.
ATO Cents per Kilometre Rate
Increases to $0.78 (for up to 5,000 business kms).
Luxury Car Tax
Fuel efficient vehicles. $84,916.00
All other vehicles $71,849.00
LCT rate of 33% – LCT rate of 33% remains unchanged.
GST Car Limit
You can only claim up to the ATO GST Limits these have been increased to:
2022/23 $64,741.00.
GST $5,885.00 (maximum claimable).
However, the full value of the car is still an asset to the business.
Fuel Tax Credits
Fuel Tax Credits excise were halved by government and this ceases on 30th September 2022 @11.59pm.
Fringe Benefits Tax
FBT Rate to 31st March 2023 – 47%
Type 1 higher gross-up rate 2.0802%
Type 2 lower gross-up rate 1.8868%