End of Financial Year. What you need to know.
End of financial year is approaching … cue the dramatic music!
There is always plenty happening in the depths of winter as the end of financial year approaches. Here’s a few things you need to know about:
There’s a couple of significant superannuation changes that employers need to take note of. In many cases your payroll software will make these changes for you, however it is your responsibility as an employer to make sure these changes happen.
- The superannuation guarantee rate increases from 10% to 10.5% from 1st of July 2022.
- The $450 per month eligibility threshold will be removed. (Previously meant that if an employee has less than $450 in gross wages for the month, they were not entitled to superannuation payments.)
Furthermore, Fair Work will review all awards, so if you have employees with their payrates linked to an award you will need to keep an eye out for this.
Additional Super Contributions
If your superannuation balance was under $500,000 on the 30th June 2021 you may be eligible to make some additional superannuation contributions on top of the current year’s cap of $27,500.
Any unused concessional contribution amounts from the 2019, 2020 and 2021 years can be caught up in the current financial year. If you would like to find out how much you are eligible to contribute, please contact the team at Patrick Rowan and Associates.
If you are looking to make contributions for this financial year it is best to do so before 20th June.
The fund needs to receive and process the contribution before the end of June, and like many businesses now, staff shortages and Covid isolations are causing delays.
Asset purchases – The immediate tax deduction for asset purchases for business owners is still available until 30th June 2023. There is no cost limit, other than for cars which are still subject to the separate cost limit of $60,733. Note however, that assets need to be adjusted for any private usage.
Covid 19 tests – purchased for work purposes are tax deductible. So, if you have purchased any tests this current year, locate your receipts. You can claim this cost if you have purchased for a work-related purpose, such as determining if you can go to or remain at work. You cannot claim a deduction if the tests were used for children to attend school or care, or you work from home.
Logbook for your car? Painful we know, but if you think your work-related use of the vehicle has increased this year, you have bought an expensive new car or if your existing logbook is five years old, it is not too late to start a new logbook. As long as you start your 12-week period before the 30th of June 2022, you are eligible to use the work-related expense for the 2022 financial year.
Cryptocurrency – as crypto has become more mainstream, the interest levels from the Australian Taxation Office (ATO) have increased. The ATO are very well informed and in most cases will be able to identify that you have sold cryptocurrency during the year. As all exchanges are different, knowing what information to provide your accountant is difficult. Some kind of “gain report” or a “profit loss” report would be ideal. At the very least if you can download a csv file of the transactions for the year that should allow us to work our way through the figures.
Training and Technology – in the last budget the now former Coalition Government announced a 20% bonus tax deduction for staff training or technology investment. These measures were never introduced to parliament, so there are no details of what exactly would have been eligible for the bonus deduction. Furthermore, there is no guarantee that these measures will ever actually be introduced. We will keep you advised of any further developments in this area.
If you have any queries, please email: firstname.lastname@example.org and we will be in touch, alternatively, contact your Accountant directly.
Patrick Rowan & Associates