What you need to know

There haven’t been many changes in superannuation over the last few years but it’s always good to make sure that you are across what is available to you with regards to your super.

Concessional superannuation contributions

The concessional superannuation cap for the year ended 30 June 2021 is $25,000.  This means that total tax deductible contributions which can go into your superfund cannot exceed this amount – this includes any amounts that have been contributed by your employer including salary sacrifice.  If you were to choose to “top up” any employer contributions, you can claim a deduction for the top up to $25,000.

As in prior years, the contribution must be received by your fund before the 30 June 2021 to claim a tax deduction for it in the 2021 year and you must notify your super fund of your intention of claiming a deduction.

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Top Tips

As always, here are a lot of things to consider before the end of the financial year.

Here are our top 5 bookkeeping tips to help make year-end run a smoothly as possible.

• Process and make superannuation payments for employees before 30^th June to ensure you get a tax deduction for the payment.
• Once you’ve run your last payroll for the financial year reconcile payroll liability accounts (wages payable, superannuation payable & PAYG withholding payable) and finalise your Single Touch Payroll reporting. You can also reconcile, prepare and lodge WorkCover, payroll tax & Taxable Payments Annual Report (if applicable).

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As we approach the end of the financial year it’s a good time to start thinking about what you could do to minimise your tax liability.

New items for the 2021 financial year

 The company tax rate for base rate entity companies has reduced to 26% for base rate entities (a drop from 27.5%). From 1 July 2021, the tax rate will drop to 25%.

• In last year’s budget, loss carry-back measures were introduced. This means eligible companies can claim a refundable tax offset using the new loss carry-back measures when they lodge their 2021 financial year tax returns.
• Where your business has claimed JobKeeper & Cash Flow Boost payments throughout the 2021 financial year, ensure that records are kept to prove eligibility.
• Temporary full expensing for asset purchases and instant asset write off: please refer to our detailed summary here.
• Carry-forward unused concessional contributions: individuals can claim an additional tax deduction if a superannuation contribution is made to use up unused concessional contributions from the 2019 and 2020 financial years. Please refer to our detailed summary here.

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If your business has been eligible for the SA Payroll tax waiver over the last 12 months it’s important to note that the month of May is the last month where the payroll tax exemption is available.

Monthly payroll tax payments will resume in July 2021 which means that payroll amounts paid in June WILL be subject to payroll tax (payroll tax payments are based on the previous month payroll).

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Supporting the recovery

Overview

The main themes of Tuesday’s budget was job creation and continued support of economic growth – with an overall goal of reaching an unemployment rate of below 5%.

The Government plans to do this via a raft of infrastructure, business and individual spending packages, along with targeted spending on some specific demographics such as aged care, disability and women.

Funding has been provided for the aged care industry to start the management of matters arising from the Royal Commission. Of the almost $18 billion earmarked for aged care, a large proportion is expected to be spent on the workforce, including the number of aged care workers and increased training and support.

The NDIS has been additionally funded to the tune of approximately $13 billion. There was also a Women’s Budget Statement allocating $3.4 billion to improve the economic security and status of women in Australia.  There will also be significant funds directed to mental health.

The level of spending announced is expected to result in Australia staying in deficit for at least the next 5 years, with net debt approaching $1 trillion.

Importantly, it is expected that the international borders will remain closed until mid-2022, an assumption which underpins the estimates.  Other assumptions made in the budget estimates are widely thought to be conservative which may result in better than expected numbers in the future.

It is widely anticipated this will be the last budget before the next Federal election which puts some of the announced spending into context.  Many of the measures announced will not come into effect until after 1 July 2022 or 1 July 2023 – under the administration of the next government.

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