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You have spent so long growing your business, putting in the hard yards and investing every single dollar back into it so it can run smoothly. You have gone without. You have counted every dollar. You have seen it grow, you now have had your first profitable year, and maybe you are finally so busy you have just said your first “no” to a potential customer.
So the question is, is it time to employ? It can be very exciting but can at the same time be quite daunting. You will be responsible for this employee – you will be their boss, mentor, coach. You may now be in charge of their mortgage payments or kids’ school fees. But it might mean you can finally delegate some of your tasks so you can focus on what is really important for the business.
Hiring too early may bring cash-flow problems, and an employee sitting around twiddling their thumbs. Hiring too late may mean you lose some customers to a new competitor on the block or be inundated with work you can’t accomplish on your own.
Of course, there is no hard and fast solution that will apply to everyone, but by following these next few tips it may put you in the right stead to make the correct decision.
You may have heard the age-old rule that an employee should only either make money for the business; or save money for the business.Generally, these are good rules, but in those early days, making money could be much more important than saving money.
It’s always a good idea to write out an exhaustive list of all the tasks you are doing – no matter how big or small – and work out what can be delegated. You will know it’s time to bring in an employee if you can then identify the tasks someone else could do that will also increase revenue.Some examples might include:
· Product Development – Developers, Tradesman
· Business Growth – Business Development Manager,Content Marketers
· Client Support – Client Liaison Officers, HelpDesk
Yep you might sit there some days wishing you had an employee to just “help you out” or help to get “on top of things” and although this may sound appealing, it isn't usually good enough to warrant making that first big jump.
Instead, you want to get really specific. You want to be able to write out a job description that is clear and concise so your new employee knows exactly what is expected of them. Ever heard of the acronym SMART KPI? This stands for Specific, Measurable, Attainable,Relevant and Time-Bound Key Performance Indicator and it’s a very useful metric that is used to assess employee and company performance.
Before you advertise for the position, write out a SMART job description. The clearer the set of responsibilities you lay out, the more accurately you'll be in hiring someone to fill these responsibilities.
Still a little undecided? Hiring a contractor may be a great first step to work out if they are helping the company, or even perhaps holding you back. You can sort out any teething issues and the great thing is you maybe able to transition this person into a full-time employee, or if it’s not working out, simply part ways at the end of their contract.
There may be superannuation and withholding tax obligations in respect to the contractor depending on what the contract stipulates, so we suggest always checking in with us to understand your tax obligations.
Think you’ve ticked all the boxes and you’re ready to make that exciting first hire? Congratulations! Now workout exactly how much you will need to spend on their wages for three months, including tax and superannuation, and make sure you have the cash stashed away in case you experience a slow month. Setting up a separate business bank account for payroll can be a great idea to ensure you’ve always got this money ready to go.
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Strategy is our strength, so if you’re on the fence about employing or would like help planning your future move(s), get in touch with one of our Attune Advisory team. Phone 1300 866 113or click here.
· Salaries and Wages;
· Pay-As-You-Go Withholding (PAYGW); and
· Superannuation.
This means the ATO gets this information in real-time, and if you have already been using it, you will know it’s the end of preparing those clunky end of year “group certificates” (phew!).
STP started on 1 July2018 for employers with 20 or more employees and 1 July 2019 for employers with 19 or fewer employees and is a mandatory obligation.The ATO has provided several concessions depending on business, industry, or employer types. Most of these ended on 1 July 2021 so chances are your STP reporting is up and running.
The ATO has outlined your various reporting options here so if you aren’t already connected, we suggest you have a read or speak with us about what you need to do.
In short, you either report automatically through your Cloud based accounting software package (like Xero, QBO, MYOB etc) or you can use a specific STP-enabled payroll software.
Gone are the days of receiving the hand-written Group Certificates by 14 July each year! This information has already been reported to the ATO each payday, the information is there and available in real time. Your employees can access their year-to-date and end-of-year payroll information via their MyGov account anytime of year, and their accountant can access this same information via the ATOTax Agent Portal.
Having this information readily available has been incredibly handy for both employees and accountants alike. It can help with reporting with government agencies such as Centrelink, applying for any personal finance and can help accountants when it comes to tax-planning time of year – ultimately saving everyone time and money.
If you’d like to learn more about payroll and STP, get in touch with one of our Attune Advisory team. Phone1300 866 113 or click here.
We’re all about the right strategy for your financial situation, and super will be a big part of that in the years to come.
Have you got employees? Don’t forget that the SuperannuationGuarantee (SG) contribution rate increased to 10% on 1 July 2021.
The SG rate is the minimum percentage of an individual’s salary (ordinary time earnings) that their employer must pay into their superannuation. The SG rate has been 9.5% since 2014 and the increase is part of the Government’s long-term plan to increase the rate to 12% by 2025.
For all superannuation accrued for the July to September2021 quarter, the due date for payment is 28 October 2021. If you are already using a Cloud-based accounting software program, chances are the increase has already kicked in behind the scenes but it’s worth double checking before this date to make sure there’s no additional payment surprises coming your way.
The annual limit on how much you can pay into your super also increased on 1 July 2021.
Caps for both concessional (before-tax) and non-concessional(after-tax) contributions have been increased for the 2021/22 financial year –as shown in the table below.
Carry-forward rules allow you to make extra concessional contributions – that is, above the general concessional contributions cap –without having to pay extra tax. The carry-forward arrangements involve accessing unused concessional caps from previous years. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.
For example, if you only contributed $15,000 as a concessional contribution in the 2021 financial year, you effectively have an unused portion of $10,000 available. This means in the 2022 financial year you could contribute $27,500 plus the extra $10,000 carried-forward from 2021. This can be an effective way of getting more money into super plus also maximising your tax deductions.
Although it’s early in the game to start talking tax planning, we suggest you consider any concessional contributions you have made since 2019 and if any unused amounts can be made in 2022 to reduce your tax and increase your super. Any unused carried-forward amounts will expire after 5years so either use it or you may lose it! There are some eligibility criteria you will need to consider and your total super balance must be less than$500,000 to qualify, but please contact any of our team so we can review your individual position and eligibility.
Let’s get you Attuned to your super situation… For more advice on how you can prepare yourself and your business for whatever lies ahead, get in touch with one of our Attune Advisory team. Phone 1300 866 113 or click here.
If your business has been adversely impacted by the recent lockdown in NSW, support is coming.
The NSW and Federal Governments have announced a series of new measures to support business during extended lockdowns of four weeks or more.
- Up to $15,000 through the expanded NSW 2021 COVID-19 business grants program
- Up to $10,000 cashflow support per week
- NSW micro business grants
- NSW payroll tax deferrals and a 25% payroll tax waiver
- NSW Rent protections and grants
- NSW Sector support for the arts and accommodation sector
You can streamline the process of applying for business support by ensuring:
Your business and contact details are up to date on the Australian Business Register
· Your personal and business details are up to date and you have a MyServiceNSW account with a business profile
The previously announced small business grants have been increased to up to $15,000 and expanded to eligible businesses (including not-for-profits and sole traders) with annual wages of up to $10 million.
The value of the grant is determined by the impact of the lockdown on your turnover. Your business will need to prove a decline in turnover across a minimum 2 week period after the commencement of the major restrictions.
The full eligibility criteria, including how the decline of turnover test will be applied, have not been released as yet. In general, your business will need to have a NSW registered ABN or be able to demonstrate it is physically located and primarily operating in NSW with turnover of more than $75,000 per annum (for businesses under this threshold see $1,500 Micro Business Grants).
We will work with you once the details have been released to help you assess your eligibility and apply for the grant.
Applications open on 19 July 2021 through ServiceNSW.
A cashflow payment between a minimum of $1,500 and maximum of $10,000 per week based on 40% of the NSW payroll payments of your business (including not-for-profits).
Businesses without employees that meet the eligibility criteria such as sole traders, will be able to access a payment of $1,000 per week.
The cashflow support will cease when lockdown restrictions are eased or when the Commonwealth hotspot declaration is removed.
- Annual turnover between $75,000 and $50 million
- Demonstrate a 30% decline in turnover
- Maintain your full time, part time and long term casual staffing level as of 13 July 2021
- Impacted by the current Greater Sydney COVID-19 restrictions
The full eligibility details, including how the decline in turnover test and how the headcount will work have not been released as yet.
Applications for the cashflow support have not yet opened but you can register your interest from 14 July 2021 through ServiceNSW.
A new grant for micro businesses (including sole traders) providing $1,500 per fortnight while lockdown restrictions apply. The grants are available from week one of the lockdown until restrictions are eased.
- Annual turnover of more than $30,000 and less than $75,000
- Demonstrate a 30% decline in turnover
- Impacted by the current Greater Sydney COVID-19 restrictions
Applications for the cashflow support have not yet opened but you can register your interest from 14 July 2021 through ServiceNSW.
NSW payroll tax has been deferred for July and August 2021 until 7 October 2021 for all businesses.
The due date for the 2020-21 annual reconciliation has also been deferred until 7 October 2021.
Previous payroll tax deferrals and payment arrangements for 2020-21 due in July 2021 have not been deferred.
Businesses with Australian wages of between $1.2 million and $10 million that have experienced a 30% decline in turnover, will be provided with a 25% payroll tax waiver in 2021-22. Further details of the reduction will be available by the end of August from RevenueNSW.
Commercial and retail rent protections will be reinstituted.
Legislative amendments will be introduced shortly providing a short-term eviction moratorium for rental arrears where a residential tenant suffers loss of income of 25% due to COVID-19 and meets certain other criteria.
Commercial and retail landlords will need to attempt mediation before recovering a security bond, or locking-out or evicting a tenant impacted by Public Health Orders.
Land tax relief equal to the value of rent reductions provided by commercial, retail and residential landlords to financially distressed tenants will be available for up to 100% of the 2021 land tax liability.
A $75 million support package will be provided to the performing arts sector to be administered by Create NSW.
The package will be delivered in two stages:
- Immediate support to provide relief to eligible organisations who were staging performances during the period covered by the Public Health Orders.
- Funding available to support eligible organisations to reschedule performances once it is safe for restrictions to ease.
Eligible organisations include performing arts organisations with heavy reliance on box office income, including not-for-profit performing arts companies who were staging, or scheduled to stage performances during the lockdown period, commercial producers and some live music venues.
Organisations will need to provide evidence of performances scheduled, venues and average ticket prices.
CreateNSW will open applications from 23 July 2021.
A $26 million support package will be provided to the accommodation sector.
No further details are available at present.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.
What lockdown support is available to individuals?
If you can’t work because you or someone in your household is impacted by COVID-19, support is available.
There are two payments accessible to individuals: the COVID-19 Disaster Payment; and, the Pandemic Leave Disaster Payment.
You can apply for the COVID-19 Disaster Payment and the Pandemic Leave Payment through your MyGov account if you have created and linked a Centrelink account (or phone 180 22 66).
The COVID-19 Disaster Payment is a weekly payment available to eligible workers who can’t attend work or who have lost income because of a lockdown and don’t have access to certain paid leave entitlements. If you are a couple, both people can separately claim the payment.
The disaster payment is accessible if the hotspot triggering the lockdown lasts more than 7 days as declared by the Chief Medical Officer (you can find the listing here). However, from 18 July 2021, the disaster payment will be available to anyone in NSW who meets the eligibility criteria.
The COVID-19 disaster payment amount available depends on:
- How many hours of work you have lost in the week, and
- If the payment is on or after the third period of the lockdown.
The higher payment rate applies if you have lost 20 or more hours of work per week.
* This payment rate applies if you have lost at least 8 hours of work per week or a full day of your usual hours of work per week.
The payment applies to each week of lockdown you are eligible for and is taxable (you will need to declare it in your income tax return).
The COVID-19 disaster payment is emergency relief. It is available if you:
- Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia, and
- Are aged 17 years or over, and
- Can’t attend work and lost income on or after day 8 of a COVID-19 lockdown, and
- Don’t have paid leave available through your employer (other than annual leave), and
- Are not receiving income support payments, a state or territory pandemic payment, Pandemic Leave Disaster Payment or state small business payment for the same period.
A liquid assets test of $10,000 previously applied to the disaster payment but was removed from Thursday, 8 July 2021.
The Pandemic Leave Disaster Payment is for those who have been advised by their relevant health authority to self-isolate or quarantine because:
- They have coronavirus (COVID-19):
- They have been in close contact with a person who has COVID-19:
- They care for a child, 16 years or under, who has COVID-19: or
- They care for a child, 16 years or under, who has been in close contact with a person who has COVID-19.
The payment might also be accessible if you are a carer for someone impacted.
The payment is $1,500 for each 14 day period you are advised to self-isolate or quarantine. If you are a couple, you both can claim this payment if you meet the eligibility criteria.
The Pandemic Leave Disaster Payment is emergency relief. It is available if you:
- Are an Australian citizen, permanent resident or temporary visa holder who has the right to work in Australia; and
- Are aged 17 years or over; and
- Are unable to go to work and earn an income; and
- Do not have appropriate leave entitlements, including pandemic sick leave, personal leave or carers leave; and
- Are not getting any income support payment, ABSTUDY Living Allowance, Paid parental leave or Dad and Partner Pay.
The payment is taxable and you will need to declare it in your income tax return.
If you are uncertain of your eligibility, talk to Services Australia.
If you are concerned about the impact of disaster relief payments on you, talk to us!
A targeted eviction moratorium will be introduced to protect residential tenants who have lost 25% of their income due to COVID-19.
Residential landlords who decrease rent for impacted tenants can apply for a grant of up to $1,500 or land tax reductions depending on their circumstances.
The material and contents provided in this publication are informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information. If expert assistance is required, professional advice should be obtained.
// Updated 14 July 2021
