The new financial year is quickly approaching and for many businesses that will mean changes will have to be made to their payroll to remain compliant with legislation.
Following is a summary of key information any payroll professional requires to ensure compliance in the 2020/21 financial year:
- For redundancies, the Lump Sum D threshold will increase to $10,989 + $5,496 for each completed year of service
- The ETP indexed cap will increase to $215,000 from 1 July 2020
- The Maximum Superannuation Contributions base will increase to $228,360 per annum, which equates to $57,090 per quarter. For any earnings above this quarterly limit, employers do not have to pay SG Contributions
- The Concessional Contributions Cap remains at $25,000 for everyone.
- Superannuation Guarantee remains at 9.5%
- Medicare Levy remains at 2%
- The income testing levels for the Private Health Insurance Rebate for this year have remained the same at $90,000 for singles and $180,000 for families
- The cents per kilometre rate has changed to 72 cents per kilometre. Up to 5,000 business kilometres can be claimed without paying tax. If paying in addition to 5,000 kilometres or more than 72 cents, the tax should be withheld from the applicable portion
- On 1 July 2020, the Australian minimum wage for 2020 to 2021 increased by 1.75% per cent to $19.84 per hour or $753.92 per week. Unlike previous years (due to COVID-19), where the national minimum wage increase would take effect for every award at once, this time, the increase will gradually be phased in over 3 stages.
- STSL (Study and training support loans tax tables) income thresholds have reduced and will commence at $46,620.
- The High Income Threshold is now $153,600. This is the amount of money earned by an employee before the relevant award stops applying to them.
If you are unsure if your payroll is compliant, call E-Payoffice and enquire about our payroll service. For most businesses, our payroll service is a cost-effective payroll solution compared to in-house processing.