Blog

With mere weeks remaining in FY24, now is a great time to think about your EOFY preparation.

A good place to start? Preparing your payroll to make finalisation as easy as possible come July.

Completing your EOFY is better off on Xero. To help you get you through from start to finish, we’ve included some handy steps to guide you through the process.

1. Check your employees’ records 

As part of Single Touch Payroll (STP), there are key compliance requirements that affect the way employees are set up in Xero. 

In Xero Payroll, all active and terminated employees (who will be included in the STP finalisation for the financial year) will need an employment type, income type and tax scale defined in their records. 

Review your employees’ records to ensure they’re STP compliant. You can run the Employee Contact Details report to check for accuracy, keeping a close eye on things like date of birth, email address and postcode.

2. Review pay items and their settings

Under STP,  the ATO requires the correct reporting categories be used for your earnings, deduction and paid leave pay items. Allowances will also need to be assigned an appropriate reporting type.

Because these categories tell the ATO how to treat each type of payment you’re reporting through STP, it’s important to double-check that the earnings, deduction, paid leave and allowance pay items used in the current financial year are correctly assigned. 

3. Post and file any pay runs for the 2023/2024 financial year

Any pay runs with a payment date in this financial year will need to be posted and filed before you complete your employees’ STP finalisation. If these pay runs are to be reported in FY24, remember that you’ll need to make sure the payment date is on or before 30 June 2024.

Be sure to check that all of your pay runs have been filed to the ATO successfully using STP.

4. Process any outstanding superannuation payments

To claim a deduction on superannuation accruals submitted via auto super for the current financial year, super batches should be approved no later than 2:00pm AEST, 18 June 2024. We recommend marking this date in your calendar so you don’t forget.

If you’re not registered for auto super, it’s not too late. Alternatively, the payments can be made manually outside of Xero.

5. Reconcile your payroll accounts

After processing all pay runs for the financial year, it’s important to forensically check the accuracy of your reporting. One way to do this easily is by generating the Payroll Activity Summary report and comparing it with the General Ledger report. 

You can specify a custom date range in both reports to help find any discrepancies. If you come across any discrepancies in your payroll accounts, you can use the remove and redo feature to edit the transaction and allocate it to the correct accounts.

Troubleshooting tips

• If you have multiple payroll expense accounts for earnings or superannuation, be sure to add up the totals for each account when comparing them to the Payroll Activity Summary report.
• Use the Account Transactions report to identify any transactions that may have been incorrectly reconciled against your Expense Accounts.
• Check for any manual journals that may have impacted your totals by running the Journal report and clicking on Manual Journals.
• If you’re unable to locate a discrepancy, try running your reports using a smaller date range to narrow down the issue.
• If you started using Xero midway through the financial year, double-check that the employee opening balances match your organisation’s conversion balances to avoid any discrepancies.

6. Review the Payroll Activity Summary report against the Payment Summary Details report

It can be easy to get the Payroll Activity Summary report and the Payment Summary Details report confused, so remember you’ll still need to compare this information if you’re completing an STP finalisation. You can run these two reports for a custom date range and make sure the information balances.

It’s important to note that the Payroll Activity Summary report shows gross earnings, whereas the Payment Summary Details report shows taxable earnings.

If there are salary sacrifice or pre-tax deductions that have been processed during the financial year, they will need to be deducted from the gross wages that show in the Payroll Activity Summary report. The total should then match the Payment Summary Details report (note that this will only show truncated values – the cents will not show in this report).

7. Remember to identify and amend any mistakes

Any errors made throughout the financial year can be corrected using an unscheduled pay run. Simply create the pay run for the required period and enter the adjustment amounts. You can even enter negative values, if needed.

You will need to check that the payment date of the unscheduled pay run falls within the correct financial year (for example, on or before 30 June 2024) to ensure it’s reported correctly.

8. Process STP finalisation

Last but not least, it’s time to process your STP finalisation. Xero’s product team has been working to make this process simpler, and easier to understand. Xero users might notice some tweaks this year, such as an improved layout for the STP YTD Summary and clearer totals columns. 

You’ll need to file at least one pay run before you’re able to complete the STP finalisation process. Your first submission will include all year-to-date (YTD) payroll information that has been entered into Xero.

Keep these tips in mind to help you along the way:

• Information included in the STP finalisation will pre-populate based on the information processed in Payroll – you’ll be able to see gross totals, taxes and super. You can also view and easily edit RFBA and RFBA-E (reportable fringe benefit amounts).
• If you need to report any leave paid out on termination as ‘Lump Sum A’ or ‘Lump Sum B,’ you can do this by processing an unscheduled pay run.
• If you have terminated any employees on or before 30 June 2024 who need fringe benefit tax (FBT) amounts reported, you can use the toggle Show terminated employees for RFBA at the bottom of the STP finalisation page.
• Any Employment Termination Payments (ETP) that have been processed can be shown by clicking View Report to see the STP YTD Summary.
• If you started using Xero part way through the financial year and need to report employee opening balances through STP.
• Based on the ATO’s requirements, gross payments are reported as the pre-sacrificed amount. This means salary sacrificed amounts, such as pre-tax deductions and reportable employer super contributions (RESC), are included in gross payments.

Looking ahead to FY25

The Government has made changes to individual income tax and superannuation guarantee rates, as well as thresholds such as STSL indexation (study and training loan indexation). These come into effect from July 1 2024. Pay runs with a payment date of 1 July 2024 or later will have these new rates automatically applied.

The super guarantee (SG) rate is increasing from 11 to 11.5 per cent on 1 July 2024. Any employees with a superannuation line set up with a rate type of statutory rate will be automatically updated. If their rate type has been set up as Percentage of Earnings, you will need to ensure you edit this percentage manually. These changes to income tax rates and thresholds will also be automatically applied in pay runs with a payment date of 1 July 2024.

If your organisation is impacted by changes to the minimum wage, you will need to update your employees’ pay templates. To find out if these changes could affect you, please refer to the Fair Work Ombudsman.

Looking for EOFY payroll help? Call Flor-Hanly’s Xero Certified Advisors on 07 4963 4800 for everything you need to know (and do) to round out FY24, and set up strong for the new financial year ahead.

Source: Xero

2024–25 Labor Federal Budget highlights

Described as a “responsible Budget that helps people under pressure today”, the Treasurer has forecast a second consecutive surplus of $9.3 billion.

The main priorities of the government, as reflected in the Budget, are helping with the cost of living, building more housing, investing in skills and education, strengthening Medicare and responsible economic management to help fight inflation.

The key tax measures announced in the Budget include extending the $20,000 instant asset write-off for eligible businesses by 12 months until 30 June 2025, introducing tax incentives for hydrogen production and critical minerals production, strengthening foreign resident CGT rules and penalising multinationals that seek to avoid paying Australian royalty withholding tax. 

The tax, superannuation and social security highlights are set out here:

READ FULL SUMMARY

BUDGET AT A GLANCE

Income tax

• The instant asset write-off threshold of $20,000 for small businesses applying the simplified depreciation rules extended for 12 months until 30 June 2025
• The foreign resident CGT regime will be strengthened for CGT events commencing on or after 1 July 2025
• A critical minerals production tax incentive will be available from 2027–28 to 2040–41 to support downstream refining and processing of critical minerals
• A hydrogen production tax incentive will be available from 2027–28 to 2040–41 to producers of renewable hydrogen
• The minimum length requirements for content and the above-the-line cap of 20% for total qualifying production expenditure for the producer tax offset will be removed
• A new penalty will be introduced from 1 July 2026 for taxpayers who are part of a group with more than $1 billion in annual global turnover that are found to have mischaracterised or undervalued royalty payments
• The Labor government’s 2022–23 Budget measure to deny deductions for payments relating to intangibles held in low- or no-tax jurisdictions is being discontinued
• The start date of a 2023–24 Budget measure to expand the scope of the Pt IVA general anti-avoidance rule will be deferred to income years commencing on or after assent of enabling legislation
• Deductible gift recipients list to be updated.

Superannuation

• Superannuation will be paid on government-funded paid parental leave (PPL) for parents of babies born or adopted on or after 1 July 2025
• The Fair Entitlements Guarantee Recovery Program will be recalibrated to pursue unpaid super entitlements owed by employers in liquidation or bankruptcy from 1 July 2024.

Tax administration

• The ATO will be given a statutory discretion to not use a taxpayer’s refund to offset old tax debts on hold
• Indexation of the Higher Education Loan Program (and other student loans) debt will be limited to the lower of either the Consumer Price Index or the Wage Price Index, effective from 1 June 2023
• A pilot program of matching income and employment data of migrant workers will be conducted between the Department of Home Affairs and the ATO
• A new ATO compliance taskforce will be established to recover tax revenue lost to fraud while existing compliance programs will be extended
• The ATO will have additional time to notify a taxpayer if it intends to retain a business activity statement refund for further investigation
• The 2019–20 Budget measure “Black Economy — Strengthening the Australian Business Number system” will not proceed.

The Budget also includes various amendments to previously announced measures, as well as a number of income tax measures that have already been enacted prior to the Budget announcement. These enacted measures have not been discussed in detail:

• revised stage 3 personal income tax cuts (enacted by the Treasury Laws Amendment (Cost of Living Tax Cuts) Act 2024 (Act No 3 of 2024))
• Medicare levy and surcharge threshold changes (enacted by the Treasury Laws Amendment (Cost of Living—Medicare Levy) Act 2024 (Act No 4 of 2024)), and
• specific exemption for Australian plantation forestry entities from the new earnings-based rules introduced as part of thin capitalisation reforms (enacted by the Treasury Laws Amendment (Making Multinationals Pay Their Fair Share—Integrity and Transparency) Act 2024 (Act No 23 of 2024)).

The government anticipates that the tax measures put forward will collectively improve the Budget position by $3.1 billion over a 5-year period to 2027–28.

Full Budget papers are available at budget.gov.au and the Treasury ministers’ media releases are available at ministers.treasury.gov.au.

Source: CCH

QRIDA First Start and Sustainability Loans

Producers seeking financial support to boost their beef business will be able to explore their options with the Queensland Rural and Industry Development Authority (QRIDA).

For those with aspirations of launching their grazing venture, QRIDA’s First Start Loan offers up to $2 million as a financial stepping stone to purchase land, carry out the family succession plan or enter a lease or share-farming arrangement.

This loan is a financial stepping stone for beef producers looking for a pathway into the industry. The First Start Loan is designed to financially support aspiring beef producers to enter the industry, get their foot on-farm and help them establish their beef business.

For those beef producers already in the industry, enhancing productivity and profitability will be front of mind. QRIDA’s Sustainability Loan offers up to $1.3 million to help beef producers with the financial boost to improve the sustainability of their farming systems, natural resource management and financial strategies.

FIRST START LOANS

Sustainability Loans offer existing producers a suite of options to improve the productivity and profitability of their enterprise. This loan can be used for improving land, adopting ag-tech, diversifying into other ag-related industries, enhancing water accessibility or infrastructure and even expanding producer’s operations.

If improving the drought resilience of your beef enterprise is on your to-do list, QRIDA has drought support available. Discover the range of grants and loans tailored to help you weather the adversities of drought, including a Drought Preparedness Grant or Drought Ready and Recovery Finance Loan.

With drought grants and loans, QRIDA is encouraging beef producers to proactively plan for drought before it’s too late. For those currently experiencing drought, QRIDA can help navigate the financial challenges and build a more resilient beef business.

DROUGHT SUPPORT

After an intense disaster season, QRIDA has supported producers on their disaster recovery journey with disaster grants and loans available to help re-establish normal operations and assist with clean-up and recovery costs.

Flor-Hanly operates throughout Mackay, Clermont and Central Queensland. Our accounting team works with you to help you determine, focus on and achieve your personal and business goals. Contact us on 07 4963 4800.

Source: QRIDA

Contribution caps to increase from 1 July 2024

Following the release of the latest Average Weekly Ordinary Time Earnings (AWOTE) index, the expected increase to the contribution caps from 1 July 2024 has been confirmed.

As a result, from 1 July 2024:

• The standard Concessional contribution cap will increase from $27,500 to $30,0001.
• The Non-concessional contribution cap, which is expressed as 4 times the standard concessional contribution cap, will increase from $110,000 to $120,0002.
• The maximum Non-concessional cap available, under the Non-concessional contribution bring-forward provisions, will increase from $330,000 to $360,0003.
• The Total Superannuation Balance Thresholds, used to determine the maximum amount of bring-forward Non-concessional contributions available to an individual, will also be adjusted.

The Non-concessional contribution caps and thresholds are summarised in the table below:

In addition to the adjusted contribution caps and thresholds outlined above, several other thresholds will also be impacted including:

• the eligibility thresholds for the Superannuation Government Co-Contribution
• the CGT Contribution cap (which applies following the sale of eligible small business assets)
• the Low-Rate Cap (which applies to the tax treatment of superannuation withdrawals)
• Redundancy tax-free thresholds, and
• The Superannuation Guarantee maximum contribution base.

The General Transfer Balance Cap, which is indexed according to movements in the Consumer Price Index (CPI), had already been confirmed as remaining set to $1.9 Million for the 2024-25 financial year.

Source: SMSF Association

$3.3M boost for ag sector in new round of Rural Economic Development Grants

Expressions of interest open for round six of Rural Economic Development Grants

• $3.3 million to support good jobs and better services in rural and regional Queensland
• EOIs close on 28 March 2024
• For more information visit qrida.qld.gov.au/program/rural-economic-development-grants »

Rural businesses across Queensland’s primary production sector can now submit an expression of interest (EOI) for round six of the Government’s successful Rural Economic Development (RED) Grants scheme.

The co-contribution grants of up to $200,000 will continue to strengthen primary production sectors and bolster jobs in rural and regional communities.

Grant funding may be used for activities such as capital expenditure on buildings, plant and equipment, as well as consumables used for the project.

It may also be used for training costs and technical support for specific projects, as well as salary and on-costs for staff and professionals working on activities for the funded project.

EOIs for the sixth round of the RED Grant scheme will close on 28 March 2024. Successful EOIs will be advised by 17 May 2024 and then be invited to submit a full application by 21 June, with final grants awarded from 16 August 2024.

The Queensland Rural and Industry Development Authority (QRIDA) administers the RED Grant scheme on behalf of the Department of Agriculture and Fisheries. The new round, worth $3.3 million, will generate jobs, expand agricultural supply chains and provide economic benefit to rural areas.

Source: QLD Government

Check if you can claim for fuel tax credits

You can claim credits for the fuel tax (excise or customs duty) included in the price of fuel used in business activities.

You can claim for taxable fuel that you purchase, manufacture or import. Just make sure it’s used in your business. Taxable fuels include liquid fuels, fuel blends and gaseous fuels.

Check what activities you can claim for

You can claim for business activities in:

•  machinery
•  plant
•  equipment
•  heavy vehicles over 4.5 tonnes
•  light vehicles on private roads (not on public roads)

To be able to claim, you must be registered for goods and services tax (GST) and fuel tax credits.

Register for fuel tax credits (and other taxes)

Register for fuel tax credits through the Business Registration Service. You can use the same form to register for other taxes at the same time.

Before you apply:

• check if your business activity is eligible by using the Fuel tax credit eligibility tool
• make sure you’re registered for GST

If your business uses fuel, you may be able to claim credits for the fuel tax included in the price of fuel. Find out if you’re eligible to register for fuel tax credits by contacting Flor-Hanly's accountants in Mackay on 07 4963 4800.

Queensland Workforce Strategy: Workforce Connect Fund

Through the Workforce Connect Fund, small businesses can apply for an HR Support Grant of up to $5,000 (subject to available funding) to implement new and innovative HR solutions to address an immediate need.

Speak to an Industry Workforce Advisor about accessing the grant and enhancing your HR strategy today.

Learn more about the Workforce Connect Fund initiative here.

Having trouble retaining employees?

Building strong and productive working relationships is integral to the success of any business, but what do employees want? Sometimes the answer to that question is not so easy to find!

That’s why the Back to Work team has released the Harrison Tool for Retention — to help employers retain staff within their business.

Using the tool, employers can start conversations with their employees about what motivates them, their strengths and how they can work together.

Learn more about the Harrison Tool for Retention or the other support available through Back to Work here.

Business Boost Grants Program Queensland

Key points

• Business Boost grants of up to $20,000 to help Queensland businesses are up for grabs
• $2.5 million will be available in this round
• For more information go to business.qld.gov.au/businessboost
• Applications close 12 September 2023.

The Business Boost grants program provides support to businesses to improve their efficiency and productivity through organisational development.

The grants can be used for activities that will create growth, such as strategic business planning, design and implementation of sophisticated cloud platforms and online management systems, and, planning and systems for staff management and development.

The Business Boost Grants Guidelines have been updated for this round and are available online now and businesses will be able to register their interest from 9am on 6 September 2023 until 5pm on Friday 12 September 2023.

Business Boost Grants are a pillar of the Queensland Government’s Big Plan for Small Business Strategy 2021-23. Business Boost grants have already helped 379 businesses which have shared in more than $4.7 million.

Flor-Hanly operates throughout Mackay, Clermont and Central Queensland. Our accounting team works with you to help you determine, focus on and achieve your personal and business goals. Contact us on 07 4963 4800.

Source: https://www.business.qld.gov.au/starting-business/advice-support/grants/business-boost 

Paid domestic violence leave entitlements for small business employees

Small businesses across Australia are facing a new challenge as they prepare for the implementation of paid domestic violence leave entitlements starting 1 August 2023.

This new policy grants employees up to ten paid days off during a twelve-month period to address family and domestic violence issues.

Key points about the new entitlement

• From 1 August, small businesses employees will have the right to avail themselves of ten days of paid domestic or family violence leave within a twelve-month period
• This leave will be compensated at the employee's regular pay rate, based on the hours they would have worked if they were not on leave
• The new paid DV leave entitlement builds upon the previous provision of five days of unpaid leave as outlined in the National Employment Standards.

Which businesses are covered?

Small businesses, defined as those with fewer than 15 employees, will be subject to this new entitlement. Larger businesses have already offered this benefit to their employees since February of this year.

Which employees are covered?

The DV paid leave allowance applies to all employees operating under the Fair Work system, including part-time and casual workers.

Paid domestic violence leave can be taken by employees when they need to address the impact of family and domestic violence, and it is not feasible for them to handle these matters outside their work hours. This may include making safety arrangements for themselves or close relatives, attending court hearings, accessing police services, attending counselling sessions, or meeting with medical, financial or legal professionals.

The leave is applicable if an employee is subject to coercion, control, harm or fear instigated by a close relative, current or former intimate partner or a member of their household who acts in a violent, threatening or abusive manner.

When can employees take paid family and domestic violence leave?

• Employees are not required to accumulate or accrue this leave
• All ten days are available to them from their first day of employment
• The ten-day leave allowance will renew on their work anniversary.

For existing employees when the entitlement takes effect, they can access the full ten days on the relevant start date, and the leave will renew on the anniversary of their employment commencement, not on the anniversary of the start date of the entitlement.

How should employees inform employers?

• Employees should inform their employers about their intention to take paid domestic violence leave as soon as practicable, even if this happens after they have already begun taking their leave
• Employers can request evidence from the employee to verify that the leave is being used to address family or domestic violence issues, as described above.

Employers can only use this information to ensure the employee's entitlement to family and domestic violence leave, except for specific situations where the employee consents to the employer sharing the information, when the employer is legally obligated to share the information, or when sharing the information is essential to protect the life, health, or safety of the employee or another person. Importantly, information disclosed to the employer cannot be used against the employee in any adverse action.

Are workers still entitled to unpaid family and domestic violence leave?

Starting from 1 August 2023, the new DV entitlement will replace the previous five-day unpaid leave allowance. However, until that date, small business employees can still claim the existing unpaid leave entitlement.

How is DV paid leave noted on payslips?

• To ensure the employee's safety and privacy, there are specific rules about how employers should record the use of paid family and domestic violence leave
• It should not be mentioned as such on the payslip and should be recorded as ordinary hours worked or labeled as an allowance, bonus or overtime payment
• If an employee requests it, the leave can be listed as another kind of leave, such as paid annual leave.

Support for small businesses during the transition

The Fair Work Ombudsman has prepared a comprehensive guide to help small businesses navigate the new entitlements. Businesses can access this guide for further assistance and understanding.

As the implementation date nears, small businesses need to ensure they are ready to comply with the new paid domestic violence leave entitlements and provide much-needed support to employees facing family and domestic violence challenges.

For help with any of these changes, contact the team at Flor-Hanly in Mackay on 07 4963 4800.

If you or someone you know is impacted by sexual assault, or domestic or family violence, call 1800RESPECT on 1800 737 732 or visit the 1800 Respect website.

For information about local services, download the free Daisy App. 

Accessible information and support is available via the free Sunny App which has been developed for and by women with disability. 

For Aboriginal Family Domestic Violence Hotline, call 1800 019 123.

For legal information, visit the Family Violence Law Help website.

In an emergency, call 000.

Round 2 now open

The Agribusiness Digital Solutions Grants Scheme offers co-contribution grants of up to $100,000 to support projects which result in the trialling and adoption of digital technologies into supply chains within agricultural, fishery or forestry industries in Queensland.

Key dates

• Applications open 7 July 2023
• Applications to apply close 18 August 2023
• Applicants will be notified of applications outcomes by 29 September 2023

Apply online here »

Program information

The Agribusiness Digital Solutions Grants Scheme aims to improve the resilience of the agribusiness sector or primary production industries by supporting industry organisations to implement digital technologies and systems that increase preparedness for future disruptions and risks related to biosecurity, climate and food safety. 

Co-contribution grants of up to $100,000 are available on a competitive basis to industry organisations and other entities established to advance or promote the economic development of the agribusiness sector, a primary production industry or part of a primary production industry. 

An amount of $1.3 million has been made available to fund grants under Round Two of the Scheme. Grants are subject to the availability of funding and applying for a grant is no guarantee funding will be approved.

QRIDA administers the Agribusiness Digital Solutions Grants Scheme on behalf of the Department of Agriculture and Fisheries.

Project eligibility criteria

To be eligible for funding projects must:

• implement a digital solution that will provide benefit to the agribusiness sector, a primary production industry or part of a primary production industry within Queensland; 
• improve the resilience of the agribusiness sector or primary production industries in Queensland; and
• allow for the benefits or lessons of the project to be shared across the agribusiness sector or a primary production industry. 

For further details on eligibility please refer to the Scheme guidelines.