top of page
Search

NEW FINANCIAL LANDSCAPE FOR YOUR BUSINESS



1. THE NATIONAL MINIMUM WAGE INCREASE

Starting 1 July 2024, the National Minimum Wage is set to rise by 5.75%. This directly impacts how much you should pay your employees. If you don’t have staff on minimum wages then you have nothing to worry about.

However, if you do, it's crucial to consider being prepared in advance.

We recommend that you:

  • reassess your payroll costs

  • calculate the increase's impact on your bottom line

  • consider adjusting prices or streamlining operations to offset potential expenses

  • review award wages

  • ensure compliance with relevant awards as these will also increase in line with the minimum wage rise.


2. SUPERANNUATION GUARANTEE RATE BUMP

The Superannuation Guarantee (SG) is the minimum amount employers must contribute to employees’ super funds. Currently sitting at 11%, it will increase to 11.5% in July 2024 and reach 12% by 2025. 

While this is excellent news for employees' long term savings, it does introduce added costs for businesses. 


We recommend that you:

  • budget accordingly

  • factor this increase into your financial projections

  • plan for larger superannuation contributions over the next 12 months.

Consider proactive contributions

Considering higher voluntary super payments now may reduce the impact of the impending staggered rise. Proactive contributions, whether via salary sacrifice or voluntary employer contributions, can often be adjusted as your finances allow. This is more flexible than being locked into the mandatory SG rate once it rises.

Tax advantages Contributions can sometimes offer tax advantages for both businesses and individuals. Depending on how you structure contributions, there could be tax benefits by contributing more now. Proactive contributions might come with deductions that lower your business's taxable income while simultaneously boosting employees' retirement savings. Something worth considering.

Employee morale Proactive super contributions exceeding the minimum demonstrate commitment to your team's future wellbeing. This can boost morale and even support employee retention.


IMPORTANT CONSIDERATIONS

Cash flow check Before increasing contributions significantly, assess your current financial situation. Ensure proactive payments won't strain your short term cash flow.

What type of contribution? Whether it is an additional salary sacrifice for employees, direct voluntary employer contributions or a mix, each has different implications. Let's discuss the options that best suit your business model.

Communicate the benefits Explaining to employees the long term benefit of proactive contributions ensures they understand and appreciate the value you're adding to their retirement savings.

It's not just about minimising cost, it's about strategy Proactively tackling the rise in Super Guarantee turns a potential financial burden into an opportunity. It lets you smooth out the financial impact, potentially benefit from tax deductions and demonstrate your commitment to your workforce.


3. TAX CUTS

The government will implement the Stage 3 tax cuts starting in July 2024. While primarily aimed at individual taxpayers, this could indirectly benefit your business.

HOW?

Increased consumer spending More disposable income for employees could boost their buying power and potentially benefit your sales figures.

Attracting talent The last few years has been hard on small business trying to find good, local employees. Lower personal tax rates may contribute to Australia's overall competitiveness as a place to work and ease the recruitment challenge.


4. ENERGY BILL RELIEF FOR SMALL BUSINESSES

Businesses with annual electricity bills under $100,000 may be eligible for support with energy costs. The specifics are still being finalised but stay updated for potential cost savings.


5. CHANGES TO COMPANY AND BUSINESS REGISTRATION

Annual fee increasesExpect fees associated with business name and company registration to rise in line with inflation. This will impact your administration costs.


SO, WHAT DOES THIS MEAN FOR YOUR BUSINESS?

Be proactive and plan! These changes might seem small individually, but their combined impact adds up. To stay ahead of the curve, below are a few recommendations.

Review your business financial health Let's reassess your current cash flow, expenses and profitability to pinpoint areas where adjustments might be necessary.

Consider updating your pricing If rising costs necessitate price adjustments, consider a strategic and timely approach to maintain customer satisfaction.

Seek guidance Navigating tax changes and their interaction with your business structure can be complex. Schedule a consultation with our team of professionals to ensure you are claiming all possible deductions and minimising tax liabilities.

Partnering for your success Remember, our team is here to help you understand the implications of these changes and strategise accordingly.

Comments


bottom of page