The last financial year has been a roller coaster ride for most of us. Due to the unpredictability of the Covid-19 pandemic, we’ve become uncertain of what tomorrow may look like. And yet, here we are today — working our way through the changes for the new financial year in Australia.
To prepare a good financial plan for 2022/2023, take note of the following new financial year changes that could impact your bottom line as well as your financial reporting.
New financial year changes in Australia
From 1 July 2022, Australian businesses must prepare for a number of changes related to the following:
- Changes in super eligibility
- Increase in super guarantee (SG) rate
- Increase in minimum wages
- Increase in the company and business name fees
Kindly click any of the links above to jump to a specific section or continue scrolling down below.
Changes in super eligibility
The $450 monthly threshold for super guarantee (SG) eligibility no longer applies as at 1 July 2022. This means:
- You’ll have to pay super for your employees regardless of how much you pay them.
- When you pay your employees on or after 1 July 2022, you must follow the new rules even when a portion or the entire pay period took place before 1 July. That’s because the eligibility for SG is determined by when you pay salary and wages, not by the date on which the income was earned.
- If your workers are under 18, they still have to work for more than 30 hours per week to be eligible.
- You must review your payroll and accounting software to see if they’re updated. This way, you can continue to pay the correct amount of super for your employees.
Note that this change applies only to the removal of the $450 monthly threshold. Thus, other eligibility requirements for SG are still the same.
Increase in super guarantee rate
The super guarantee rate has increased from 10% to 10.5%. This increase will continue every year until the SG rate reaches 12% by July 2025.
Like the changes in super eligibility, the same rule applies to the increase in the super guarantee rate. If you pay your employees on or after 1 July 2022, you must follow the new 10.5% rate even if your employees did their work before 1 July.
Increase in minimum wages
Following the Fair Work Commission (FWC) Annual Wage Review (2021-22), the pay rate in Australia has also increased. Note the pointers below:
- For employees not covered by an award or registered agreement. The National Minimum Wage has increased by $40 per week. This is equivalent to an increase of 5.2%. Because of this, the new National Minimum Wage should now be $812.60 per week or $21.38 per hour.
- For employees covered by an award: Award minimum wages have increased by 4.6%. This 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.
To sum it up, those who earn:
- Above $869.60 per week, get a 4.6% increase
- Below $869.60 per week, get a $40 increase.
Other award wages like junior, apprentice and supported wages that are based on adult minimum wages will also receive a proportionate increase.
The increase in minimum wages applies to most industries except for some awards in the aviation, hospitality and tourism industries which will happen from the first full pay period on or after 1 October 2022.
For more information regarding the increase in minimum wages, including high-income threshold and compensation cap, National Training Wage and unpaid pandemic leaves, read this guide from the Fair Work Ombudsman.
Increase in company and business name fees
The Australian Securities and Investment Commission (ASIC) has also increased the company and business name fees from 1 July. This is to realign with the increase in the Consumer Price Index (CPI) for the March quarter.
Take a look at the new prices of the commonly lodged ASIC fees.
Can’t view the image? Here’s the text version of the commonly lodged ASIC fees.
Company Fees
- Application for registration as an Australian Company (proprietary company that has share capital) – $538
- Reserving a company name – $55
- Late payment fee for up to one month late – $87
- Late payment fee for more than one month late – $362
- Application for voluntary deregistration of a company – $44
- Annual review fee for a proprietary company – $290
- Annual review fee for a registered scheme or a public company – $1,346
Business Name Fees
- Registration or renewal for one year – $39
- Registration or renewal for three years – $92
Read Next: Questions to Ask Your CFO to Drive Business Growth
Knowing the new financial year changes in business fees and rates will help you prepare a more structured financial plan for this fiscal year. In addition, making sure that your accounting software is up-to-date will make the process more efficient.
If you need help in forecasting your budget, our CFOs and accountants at ABJ Solutions can help. Contact us today to get a free consultation from our experts.
