July 2020: Changes to tax and pay that you need to know Posted on July 9, 2020
This new financial year in the age of COVID-19 brings a number of changes to help relieve some pressure for businesses and workers alike…
COVID-19 PAYG withholding credits
Businesses with turnover below $50 million will be handed a second round of credits, with varying amounts from $10,000 to $50,000 handed to eligible employers based on the PAYG withheld from wages as disclosed on the Activity Statements lodged for the period from March to June (inclusive).
Change to minimum wages
The Fair Work Commission (FWC) has ruled an increase in the minimum wage from $19.49 to $19.84 per hour, or $740.80 to $753.80 a week.
Reduced Sunday Penalty rates
For workers on the retail award, Sunday penalty rates have been cut from a 165% loading to a 150%, while Sunday shift work rates have decreased from 190% to 175%. Staff on the pharmacy award have had their Sunday penalty rate cut from 165% to 150%, applicable now.
Company Tax Rate Cut
Businesses turning over less than $50 million a year will have their company tax rate reduced by 1.5%. This change does not apply to companies earning only passive income such as interest, rent or dividends.
R & D incentives and threshold changes
Entities invested in R&D expenditure will need to consider new incentive components and expenditure thresholds. While the Bill has still not yet passed parliament, the changes are now in effect.
Businesses and individuals with complex financial structures are encouraged to seek advice early. The current environment amplifies the need to navigate the intricacies of tax and finance planning.
Tax is complicated at the best of times, and COVID-19 has further complicated matters.
Steve Walker is a Chartered Accountant and a technical expert on all things tax. He has developed intimate knowledge of the recent changes introduced by the Federal, State and Local governments in response to COVID-19 and can navigate the legislation that is relevant to you so that you only pay the tax that you have to.
