A number of legislative changes will come into effect from July 1st that are important for Australian trade businesses to be aware of. Here’s a breakdown of the key points you need to know to stay compliant in the 2022 – 23 financial year.
Minimum Wage Increase
The Fair Work Commission recently announced a minimum wage increase which will be effective from the first pay period on or after 1st July 2022. The increases are:
- increase by 5.2% for award rates BELOW $869.60
- increase by 4.6% for award rates ABOVE $869.60
Now is the time to check that your employees are being paid the correct award rate, including wages, penalty rates and overtime. Please note that his wage increase does also apply to apprentices.
An outline of the current Award rates per industry can be found on the Fair Work Commissions website.
Employers can check how the new rates will apply to their business via the Fair Work Ombudsman’s updated Pay and Conditions Tool.
Superannuation Guarantee Increase
The amount of super you need to pay staff will also change from 1 July 2022, when the superannuation guarantee rate increases to 10.5%. This rate will continue to increase yearly until it reaches 12% on 1 July 2025.
The new rate of 10.5% will apply to any super payments made on or after July 1, even if some or all of the pay period covers work that was done before this date.
Update your payroll and accounting systems now with the new super rate to ensure you continue to pay the correct super rate to your employees.
Learn more about employer superannuation obligations on the ATO website.
Superannuation Contributions Cap
From July 1 the superannuation contributions cap will be removed which means you will be required to pay a 10.5% super contribution to all employees over the age of 18, regardless of whether they earn more than $450/month or less.
Employees under the age of 18 are eligible for the same super guarantee if they work more than 30 hours per week.
For more information, visit ato.gov.au/PayingSuper
Debts on hold
The ATO has resumed action on Tax debts which means if you are entitled to a tax return or credit this financial year your refund may be used to pay the outstanding debt. If your business is struggling to make ends meet, you can contact the ATO or your registered tax professional to discuss what assistance may be available to you.
Find out if you have an outstanding tax debt via this website: http://www.ato.gov.au/debtsonhold.
It is important to be across these new legal changes to ensure your trade business is compliant, we recommend you contact your accountant or financial advisor to discuss these points and any impacts they will have on your operations.
