Prepare your payroll for the new Australian Financial Year FY22
It's that time of year again and as always, KeyPay is committed to taking the stress out of End of Financial Year and making year-end reporting as easy as possible for its customers.
There are a number of notable changes that will impact payroll, coming into effect on July 1 2021, which KeyPay as always will be prepared for. Here’s what you need to know for the new Financial Year:
Closely held payees
Small businesses (with 19 or fewer employees) with closely held employees were previously exempt from Single Touch Payroll (STP) reporting for those employees. These businesses will now have to begin reporting STP data to the ATO from July 1. A closely held employee is classed as a family member, Director or Shareholder of a company. Read more on managing closely held payees with STP from July 1 2021.
Superannuation Guarantee (SG) rate
In the new Financial Year, the legislated SG rate will increase from 9.5% to 10%. KeyPay users can rest assured that we will be applying this increase automatically for eligible businesses who have configured these requirements.
Tax rates and income thresholds
The Federal Budget did not result in any changes to tax rates or income thresholds for the 2021-22 financial year. The extension of the low and middle income tax offset is only claimable when individuals lodge their income tax return.
Maximum Superannuation Contribution Base (MCB)
The MCB will increase to $58,920 per quarter. From 1 July 2021, the new MCB amount will be displayed in the employee pay run defaults screen in KeyPay. Prior to that date, the system will continue to show the MCB rate applicable for the 2020-2021 Financial Year.
Genuine redundancy cap
The genuine redundancy cap has increased to $11,341 (base limit) and then $5,672 for each completed year of service;
Employment Termination Payment (ETP) cap
The ETP cap for life benefit termination payments has increased to $225,000.
Study and Training Support Loans (STSL)
STSL updates have been applied for the new financial year due to the annual indexing of the repayment income thresholds.
The Fair Work Commission handed down their annual wage review decision on 16 June 2021. A summary of the decision can be found here. To summarise, a 2.5% increase will be applied to the national minimum wage. The new national minimum wage will apply from your first full pay period on or after 1 July 2021. This means if you have a weekly pay period that starts on Mondays, the new rates will apply from Monday 5 July 2021.
This increase will also apply to the Modern Award wages, but in 3 different stages. Most awards will increase from the first full pay period on or after 1 July 2021. The increase for the General Retail Industry Award [MA000004] will apply from the first full pay period on or after 1 September 2021. The following 21 awards will increase from the first full pay period on or after 1 November 2021:
- Air Pilots Award [MA000046]
- Aircraft Cabin Crew Award [MA000047]
- Airline Operations - Ground Staff Award [MA000048]
- Airport Employees Award [MA000049]
- Alpine Resorts Award [MA000092]
- Amusement, Events and Recreation Award [MA000080]
- Dry Cleaning and Laundry Industry Award [MA000096]
- Fitness Industry Award [MA000094]
- Hair and Beauty Industry Award [MA000005]
- Hospitality Industry (General) Award [MA000009]
- Live Performance Award [MA000081]
- Mannequins and Models Award [MA000117]
- Marine Tourism and Charter Vessels Award [MA000093]
- Nursery Award [MA000033]
- Racing Clubs Events Award [MA000013]
- Racing Industry Ground Maintenance Award [MA000014]
- Registered and Licensed Clubs Award [MA000058]
- Restaurant Industry Award [MA000119]
- Sporting Organisations Award [MA000082]
- Travelling Shows Award [MA000102]
- Wine Industry Award [MA000090]
For KeyPay customers using our pre-built Modern Awards, updated versions of these award packages will be published on or before the effective increase date, with the applicable rate changes included.
If your payroll software is cloud based, these changes should apply automatically. If you have desktop software, you may have to download updates. As always, KeyPay users can rest assured that they don’t need to do anything to begin using these new tax tables, and all new rates will automatically apply to any pay run with a date paid on or after 1 July 2021.
The new Financial Year is a great time to re-evaluate existing processes and upgrade your software for the year to come. Try Australia’s leading payroll and workforce management software for free, and change the way you work and pay for FY22.