The first of July rings in a new financial year in Australia and with it comes a number of regulatory changes for your organisation to learn, manage and implement. These updates will have significant impact to your payroll operations and how you pay your employees. We have put together all that you need to know to ensure compliance. Here’s a look at the key payroll changes for the tax year 2022-23.
NSW Payroll Tax Increase
In 2020, the NSW Government reduced the payroll tax rate to 4.85% for the 2020/21 and 2021/22 financial years. As of July 01, 2022, the rate should get restored to 5.45%.
Key rates & thresholds
The ATO has updated the Superannuation, ETP thresholds and redundancy tax free amounts effective from July 01, 2022. The following threshold and amounts have been updated:
- Maximum super contribution Base: $60,220
- Super guarantee contribution rate: 10.5%
- Life and Death Benefit ETP Cap: $2,30,000
- Tax free part of genuine redundancy and early retirement scheme payments: $11,591 and $5,797 for each complete year of service.
Removing the $450 limit for Super Guarantee eligibility
From July 01, 2022, employers will be required to make super guarantee contributions to their eligible employees' super fund regardless of how much the employee is paid. Employees must still satisfy other super guarantee eligibility requirements.
Work Test for Super contribution
Currently, individuals aged 67 to 74 years can only make voluntary contributions (both concessional and non-concessional) to their superannuation or receive contributions from their spouse if they are working at least 40 hours over a 30-day period in the relevant financial year (work test).
From July 01, 2022, individuals aged between 67 and 74 will no longer be required to pass the work test for non-concessional and salary sacrificed superannuation contributions. The work test continues to apply when making personal deductible contributions.
South Australian state Budget 2022-2023
The 2022-23 South Australian state Budget was delivered on June 02, 2022. There are no changes to the payroll tax rates and thresholds. The following thresholds and rates will continue from July 01, 2022:
| Annual Australian Taxable Payroll |
Payroll Tax rate |
|
Does not exceed $600,000
|
NIL |
| Exceeds $600,000 but not $1 million |
| Exceeds $1 million but not $1.5 million |
| Exceeds $1.5 million but not $1.7 million |
Variable from 0% to 4.95% |
| Exceeds $1.7 million |
4.95% |
Tasmanian State Budget 2022-23
The 2022-23 Tasmanian State Budget was delivered May 26, 2022. There are no changes to the payroll tax rates and thresholds. Payroll tax will continue to be charged according to the table below in 2022-23:
|
Wages (AUD)
|
Payroll Tax Rate
|
|
0 to 1,250,000
|
0
|
|
1,250,001 to 2,000,000
|
4%
|
|
2,000,001 and above
|
6.1%
|
Fair Work Commission Annual Wage Review Decision
On June 15, 2022, the Fair Work Commission handed down its Annual Wage Review decision. This has resulted in an increase to the national minimum wage of 5.2% from July 01, 2022 as under:
- $812.60 per week
- $21.38 per hour
Further to this, Modern Awards minimum rates will be increased by 4.6% subject to a minimum increase of $40 per week. This means:
- Award rates above $869.60 per week will increase by 4.6%
- Award rates below $869.60 per week will increase by $40 per week.
Most Modern Awards increases will be effective from the first full pay period on or after July 01, 2021.
The following Modern Awards will have a delayed effective date of October 01, 2022:
- Aircraft Cabin Crew Award 2020
- Airline Operations - Ground Staff Award 2020
- Air Pilots Award 2020
- Airport Employees Award 2020
- Airservices Australia Enterprise Award 2016
- Alpine Resorts Award 2020
- Hospitality Industry (General) Award 2020
- Marine Tourism and Charter Vessels Award 2020
- Registered and Licenced Clubs Award 2020
- Restaurant Industry Award 2020
Stapled super fund API
From November 01, 2021, there's an extra step employers may need to take to comply with the choice of super fund rules. If a new employee doesn't choose a super fund, most employers will need to request the new employee's 'stapled super fund' details from ATO to avoid penalties.
The stapled super fund API is a service that supports employers in asking ATO to identify any stapled fund for an employee who began employment from November 01, 2021. This will help your end users comply with their obligations under the Your Future, Your Super reforms. A payer-payee link needs to be established before using this API either by submitting a TFN Declaration or by submitting a pay-event. The same is still under discussions.
Latest ATO Artefacts and PAYEVNT.0004_2020 package
ATO has released the latest artefacts and PAYEVNT package for STP 2 and is effective immediately. The mandatory start date for STP Phase 2 reporting was January 01, 2022. Digital Service Providers should make the changes to comply with the requirements as soon as is practicable to ensure compliance. There are no further ECT tests required at this time.
As part of the new package, super entitlement section PAYEVNTEMP283 is a part of Income Stream.
ATO releases new STP Phase 2 Employer Guidelines
ATO has released an updated version of the STP Phase 2 Employer Guidelines. The new content provides additional information on how to correctly report allowances. It also includes the following important new information:
- All-purposes allowances: Some awards allow allowances to be added into the hourly rate of pay. In STP Phase 2, it is required to report each of these allowances separately.
- Refunds of salary sacrifice: Reporting a refund of salary sacrifice from a previous financial year has also changed.
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