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As smaller firms look to battle against harsh operating conditions, owners and managers need to comprehend what the changes will mean.
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Small businesses must understand 1 July changes, says ASBFEO
30 June 2023
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Small businesses must understand the changes the new financial year brings, so they can effectively operate in the volatile economic environment, according to the Australian Small Business and Family Enterprise Ombudsman (ASBFEO).
Bruce Billson, Australian Small Business and Family Ombudsman said it was important for managers and owners of small entities to comprehend the changes.
“It is essential that small-business owners and managers understand these changes. They should check their payroll and accounting systems have been updated and they should talk to trusted advisers like accountants and bookkeepers. It is important to get this right,” said Mr Billson.
“With so many pressures on busy small-business leaders as we near the end of the financial year, it can be easy to overlook new and changing rules. However, there are significant changes that cannot be put aside.
“The end of the financial year is also a good time to not just have a stocktake but to take stock of the health of your business and yourself and to make use of the many helpful resources, tools, and checklists available.”
Some of the changes 1 July would bring that Mr Billson warned small businesses of were:
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Instant asset write-off
From 1 July the instant asset write-off threshold for eligible small businesses would be $20,000 on a per-asset basis for 12 months.
ASBFEO said from 1 July assets valued at more than $20,000 that could not be immediately deducted could be placed into the small-business simplified depreciation pool and depreciated at 15 per cent in the first income year and 30 per cent each following year.
Small-business energy incentive
A tax incentive worth up to $20,000 would be available for small businesses next financial year to provide an additional 20 per cent depreciation for eligible assets that support electrification and the more efficient use of energy by small businesses.
The scheme would provide businesses with an annual turnover of less than $50 million incentive to save on energy bills by making investments such as electrifying their heating and cooling systems, upgrading to more efficient fridges, or even induction cooktops.
ASBFEO said while the scheme was still pending passing through Parliament, eligible assets or upgrades would need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
Super guarantee
From 1 July the super guarantee rate would increase from 10.5 per cent to 11 per cent for all employees eligible to receive superannuation.
The ombudsman said small-business owners would need to use the new rate to calculate super on payment made to employers on or after 1 July, even if some or all of the pay period was for work done before 1 July.
National minimum wage and award rate
ASBFEO warned small businesses to be aware that from the first full pay period on or after 1 July, the national minimum wage would increase to $23.23 per hour and that award rates of pay would be increased by 5.75 per cent.
Single touch payroll
Small businesses were alerted to the requirement to have finalised their employees' single touch payroll data by 14 July.
The ATO said employers were required to report pay-as-you-go withholding information every time they pay employees through single touch payroll with the amounts reported to be used as pre-fill information in activity statements from 1 July.
Paid parental leave scheme
For employees whose baby was born or placed in their care on or after 1 July, the scheme would change with the 18 weeks of paid parental leave entitlement combined with the dad and partner entitlement of two weeks’ pay.
ASBFEO said the change would mean partnered couples would be able to claim up to 20 weeks of paid parental leave between them, while parents who were single at the time of their claim could access the full 20 weeks.
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