All Posts by Renae Pitargue

When to Register Your Business for GST

Should you register your business for GST?

Many business owners register their businesses from day one, regardless of income. Others, for example, many sole traders, choose not to register for GST until it is mandatory.

However, it is common that new businesses don’t realise they have exceeded the income threshold at which they must register! This can result in having to pay GST on sales to the ATO even if you haven’t included it in your prices – so you could lose one-eleventh of your income.

When is GST Registration Compulsory?

Your business must register for GST when it makes $75,000 income within a financial year. If you’re regularly making $6,250 or more each month, it’s time to check whether you should register for GST.

It’s good practice to check your turnover every quarter, and when you are getting close to the threshold, check every month. If you’re not yet using online accounting software, talk to us about your options, as this will make reporting and preparing for GST registration much easier.

You must register for GST within 21 days of reaching the threshold.

Special Rules

• You can voluntarily register even if your turnover is less than $75,000. This means you can complete an annual BAS if you prefer.
• If you’re making money through a ride-sharing platform like Uber, you must register for GST immediately. All commercial driving income, regardless of turnover, is subject to GST registration.
• If you want to claim fuel tax credits, you must register.
• If your business is a not for profit, the registration threshold is $150,000 per financial year.
• If you’re not an Australian resident business, the rules for working out GST turnover are different, so talk to us before registering.

Need Help?

When starting a new business, there are many decisions to make, and GST registration is just one of them. Get in contact about the benefits of registering, and we'll help you get set up on appropriate accounting software to help you on your way to business success.

Payroll Updates Sept 2022: Minimum Wage, Super Increase and STP

Are you across the recent payroll and employment law updates?

Below is a summary of these updates. 

Remember, we can help check your payroll setup, award provisions, employee agreements, and payroll costing. We can also assess if your software is ready for ATO STP Phase 2 reporting, so feel free to get in touch. 

Minimum Wage Increased on 1 July 2022

The national minimum wage increased on 1 July by 5.2% to $21.38 per hour (or $812.60 per week).

The minimum wage increase applies to employees if an award or national minimum wage defines their pay rate.

This year, the Fair Work Ombudsman (FWO) has once again implemented minimum wage increases to awards in a staggered approach. Most awards increased on 1 July; however, some will increase on 1 October.

For full details of October award increases, visit Fair Work Ombudsman October 2022 minimum wage increase. The main industries changing in October are Aviation, Hospitality and Tourism.

Tax Table Updates

While most tax tables remain the same for the 2022-23 financial year, the annual indexing of the study and training support loans have been applied.

Check the study and training support loans and working holiday makers tax tables for current withholding rates.

If you use online payroll software, the updates will be taken care of already. But if you process payroll manually, you’ll need to factor in the new rates for these tax types.

Superannuation Increase from 1 July 2022

The superannuation guarantee statutory rate increased to 10.5% on 1 July. Your payroll software should automatically update the rate, but check that the rate has updated, just in case you have manually entered the rate for some employees or payroll categories.

Review any agreements or annualised salary arrangements you have with employees that may be inclusive of superannuation.

Also, remember that the monthly $450 threshold has been removed, meaning that you must pay superannuation for all earnings. If you have a large casual workforce, this could impact your costs significantly.

Your first quarterly superannuation payment at the new rate will be due in October 2022.

Unpaid Pandemic Leave Reinstated for Some

During the COVID-19 pandemic, Schedule X was added to most awards to allow for two weeks of unpaid pandemic leave. The schedule expired in June 2022 but has been reinstated for some awards:

• Aged Care
• Ambulance and patient Transport
• Aboriginal and Torres Strait Islander Health Services
• Health Professionals and Support Services
• Supported Employment Services
• Social, Community, Home Care and Disability Services

Employees who no longer have unpaid pandemic leave available in their awards can take personal leave if unwell or use annual leave if they need to isolate themselves but are otherwise well enough to work. They can also use carer's leave if they need to look after unwell family members.

Review Your Payroll

Now is an excellent time to assess your payroll systems in readiness for the busy summer season ahead.

Talk to us. We can help check your payroll setup, award provisions, employee agreements and payroll costing. 

There are many details to take care of when engaging workers, and we can also advise on the software you are using and make sure it meets the ATO’s Single Touch Payroll reporting requirements. Note: STP reporting requirements are due for all employers by 31 December unless you use Xero, in which case the date has been extended to 31 March 2023.

Changes to Annualised Salaries in Restaurant and Hospitality Awards

Annualised salary arrangements in restaurant and hospitality awards are changing in September 2022.

After a review of the annualised arrangements in these awards, the Fair Work Commission has introduced changes that will make payments for salaried workers fairer.

Employers have been able to pay 25% on top of the base wage to allow for overtime and penalties. This meant they could do an annual reconciliation of actual hours worked to ensure the salary covered the overtime and penalties there were entitled to had they been paid by the hour. Any shortfall in wages could be paid with a single top-up payment each year.

New arrangements

The new arrangements bring in weekly outer limits to overtime and penalty hours. Employees who work more than 18 hours on weekends and public holidays within a week will need to be paid the hourly or penalty rate in addition to the regular wage.

If you’re paying staff an annual salary, the new rules mean you will need to review hours each week to check staff are not working more than the prescribed outer limits for extra hours. If they are, you will need to calculate the amount owing and pay it each week.

While an annual reconciliation of hours worked against the wages paid is still required, you can no longer wait until the end of the year to calculate and pay any shortfall.

The new system should make it fairer for salaried employees who will receive payment in the week that extra hours over the limits were worked. It should also assist with your business’s cash flow, as you'll be paying wages during busy times, and the annual top-up payment should be smaller.

Review Your Annualised Salary Agreements

If you’re paying staff a salary, there are certain obligations you have to meet.

We can help get systems in place to manage your employer obligations and make it as easy as possible to track time and perform the annual reconciliations of hours against wages paid.

Book a time to talk to us about the new provisions for restaurant and hospitality workers and how to implement them in your business.

Why you should have a business continuity plan

Keeping your business operational is a full-time job. It’s a balancing act that requires you to keep a multitude of plates spinning, while your executive team and employees support you at every stage of the operational journey.

But what happens if these plates stop spinning?

Sudden unexpected threats can catch you on the hop.

What if an unexpected circumstance comes up that derails your usual operational procedures? How will you cope? What will you do to overcome the issue? And how will you get the business back on target?

The answer lies in having a thorough business continuity plan.

What’s a business continuity plan?

A business continuity plan is an executive plan that describes the risks that exist in the business, your strategy for dealing with these known and unknown risks, and how you will mobilise your team to overcome any issues, emergencies or gaps in trading etc.

None of us truly knows what lies around the corner. Most businesses were not expecting the 2008 economic crash, or the 2020 Covid-19 pandemic. If you can plan ahead and put contingency plans in place, you'll be better prepared when a worst-case scenario does appear.

How do you formulate your plan?

Every organisation’s business continuity plan will be different. We all have different business models, different company hierarchies and different risks that are peculiar to our own sectors.

But the fundamental basis on which you create your business continuity plan will be the same however your company works.

For example:

Identify the critical areas of your business

Look at your operational business model and think about where it’s most likely to break down under pressure. Are you reliant on a specific supplier to operate? Which are the fundamental departments in your model and what do they bring to the business? Who are your core heads of department and staff, and who could deputise for them in their absence? In short, look for anything that could break down and how this could affect the whole business.

Create back-up continuity plans for each critical area

You obviously need your main continuity plan to cover the entire business. But it’s also important to look at the risks, essential personnel and key operational activities for each separate department in the company. Your finance team will need a very different continuity plan to your logistics and delivery team, for example. So, tailor each continuity plan to fit the needs of your main business areas, and make sure they’re all fit for purpose.

Assign a continuity lead and department leads

It’s a good idea to assign a main business continuity lead role or champion, so the responsibility for reviewing and updating the plan sits under someone’s remit. You’ll also need to have a lead person for each critical department, so every cog in the wider machine is represented.

Make sure everyone knows the continuity plan

A business continuity plan is useless unless the whole company is aware of the plan and knows what to do. Have a central phone number, WhatsApp group and email address set up for any business continuity emergency. And use your internal communications team to provide regular messaging, training and updates on changes to the ongoing continuity plan.

Keep the business operating

Ultimately, your continuity plan exists to keep the company operating in challenging times. It could be that your HQ is flooded out and has to be closed down and moved to an alternative location. It may be that significant employee sickness hits you, leaving only a skeleton staff to run each department. Whatever the circumstances, your plan needs a contingency in place, so you and your remaining staff can continue to trade, make sales and bring in revenues.

No plan can completely remove the threat of the unknown – that’s an impossibility. But with a continuity plan that’s well-conceived and ready to implement, you reduce the potential risks and give you and your team a practical strategy and tactics to work with.

The differences between a contractor and an employee

The terms "contractor" and “employee” can be a bit tricky to understand, but it's important for businesses of all sizes. When you're not sure if someone is really an independent contractor or employee-the penalties are severe!

There are a few reasons why a company might want to hire someone as a contractor instead of an employee. For example, the company might think that the person can get tax benefits, or they might want more flexibility in their workforce.

However, by law, it is determined by the nature of the employment relationship whether someone is an employee or contractor.

There are no exceptions to this rule.

This means that everyone has to abide by basic employment standards and entitlements, as well as statutory tax and superannuation requirements.

A breakdown of the differences between a contractor and an employee

There are some differences between contractors and employees. Here is a breakdown:

Employees:

People who work for a contract company are called employees. They work under an agreement or contract that says they will serve the employer.

Employees usually have to work in specific places and at specific times, and they usually work for only one company.

Employees are paid by the hour and their pay includes things like PAYG (Pay As You Go) taxes and other benefits.

They are also eligible for superannuation, which is a retirement savings account.

Employees have all the minimum rights required by law.

Contractor:

A contractor is someone who works for themselves under a contract.

This means that they are not employed by anyone else, but instead have a contract with one or more people or companies to do a specific job or set of jobs.

Contractors usually provide their own equipment and systems for doing the job, although this may not be the case in all situations.

They also take on more commercial risk than employees (although this also depends on the contract).

Contractors are not paid through payroll, but rather invoice for their work and receive payments directly from their clients. They have most workplace rights but different tax, insurance, and superannuation responsibilities.

An essential difference between an employee and a contractor

There is an essential difference between an employee and a contractor.

"An employee works for your company and is part of it. A contractor is their own boss and runs their own business."

How to identify if you are employing a contractor or an employee

The Australian Tax Office (ATO) has developed a tool to help you decide if someone working for you is an employee or contractor for tax and super purposes.

We recommend using this tool to help you understand if your worker is an employee or contractor for tax and super purposes.

Preventing business owner burnout

It’s tough going for business owners.

With the labour market tight, businesses are already understaffed. Add high rates of absenteeism, and remaining workers and business owners are under incredible pressure.

When you love your job and always want to do the best for your clients, it’s easy to start overworking yourself and run the risk of burnout.

It’s vital that you take care of yourself.

So here are three ways to start preventing business owner burnout:

1. Start saying ‘No’

Small business owners are experts in saying ‘Yes!’ and then figuring out the details later.

It’s how you grow a small business and build your reputation for being able to solve problems for your clients. However, if you’re overworked and stressed out, it’s time to start saying ‘No’.

Begin by turning down work from difficult clients, or work that’s outside your core business, so you’re focused on where you add the most value.

2. Identify at least one area you can delegate or outsource

You can’t do everything yourself, particularly if you’re understaffed.

Look at your processes and try to identify an area that’s not part of your core business which you can delegate or outsource.  If you look after your social media, it might be easier to delegate this to someone else.  Share the responsibility for office cleaning across the team. Or even subscribe to a meal kit service to take the stress out of cooking.

Plus, your bookkeeping and payroll are two areas that can easily be outsourced and you can always talk to us about this. 

Usually, the cost of these initiatives will quickly pay for themselves: once you feel less stressed, you’ll be more productive.

3. Hold onto your interests outside work

Running a business can be all-consuming, but hang onto your friends, sports and hobbies even when it gets busy.

Letting your relationships, health, and pastimes dwindle away will undermine your emotional, physical, and mental health.

We can help

Not sure if outsourcing tasks will pay for itself? 

We can work with you to analyse the costs and benefits of any business investment. And we can take on your bookkeeping and payroll. Get in touch, we’d love to hear from you.

How to coax your people back to the office

Globally, our relationship with work and the workplace has changed.

People got used to working from home (WFH) during the pandemic lockdowns and enjoyed the freedom it offered.

In fact, 61% of people working from home are doing so because they want to, even though their office is open, according to a recent survey.

But we also need to balance this new WFH ethic with the more sociable aspects of collaborating together at HQ.

What’s needed is a switch to hybrid working, with some time in the office and some time WFH.

So, how do you coax your people back to the office and highlight the benefits of sometimes working in one main workspace?

What turned people off of the office?

The Covid-19 pandemic came along and shook up the work dynamic in a big way. We’d had cloud technology and remote working available for some time. But the pandemic acted as a catalyst for pushing remote working as a viable, everyday work option.

This allowed us all to work. But it also had other repercussions too:

People moved out of the city

Many people moved away from the big cities and out into the suburbs/countryside during the pandemic. With cloud tech and WFH now the norm, some people felt there was no need to be in a city-based office. This removed the commute, saved money on train and travel costs and gave them more time in their day.

A change in property usage and prices

The mass exodus to the countryside pushed property and rental prices sky-high in these greener suburbs – with a huge demand for houses. And, on the flipside, big office buildings in the city have been standing empty, wasting money on rental fees and mortgage payments for companies.

So, how do you entice our people back from their suburban homes and into your office?

Coaxing your workforce back to HQ

People have got very used to working from their kitchen table. So, if you want your team to return to the office, you’ve got to deliver a workspace that offers something more.

Working from the office has to appear like a positive benefit, rather than the poorer cousin of WFH.

Creating a more welcoming environment with added amenity and flexibility will also stand you apart in a tight labour market.

Here are five ideas to try:

1. Make your workspace more inviting

Can you redesign the layout to add different work zones?. Have a hotdesking area alongside breakout tables, informal areas to make the office feel less formal and more like a home-from-home.

2. Offer perks and benefits in the office

If there are perks of being in the office, your team will be more incentivised to work here. Whether that is coffee and fruit or a offering gym memberships or cycle-to-work schemes that add tangible benefits of signing up to working a certain number of weekly hours from your HQ.

3. Have more in-person meetings

In a recent study, researchers found that video conferencing hampers idea generation, so our reliance on technology might come at a cost of creativity.

While Zoom, Teams and Google Meet can be invaluable for collaborating across time zones, it's worthwhile, encouraging your team to meet in-person also. Run more of your internal and client catch-ups as face-to-face meetings and have team huddles on a given morning in the office.

4. Encourage in-person mentoring and education

One thing that remote workers miss out on is face-to-face mentoring.

Try pairing up senior and junior staff members and giving them an assigned mentoring day to work together at HQ. And think about offering extra-curricular training sessions and ‘lunch ‘n’ learns’ to help people upskill and learn new capabilities.

5. Get creative with your ideas

To tempt people back, you’ve got to offer some fun too.

Try a ‘Bring your pet to work’ day, so people can bring their pandemic pooch to the office. Run more charity events where people can get into the spirit and work on their team bonding. Or offer after-work sports and leisure activities, like yoga, five-a-side football, quizzes, cookery classes etc.

Anything out of the ordinary that will appeal to a workforce that’s getting a little bored of working on their own from home.

Learning to make good business decisions

Making good business decisions is easier to do when you have excellent information at your fingertips – and that’s the value of having great reporting at the heart of your business.

Any cloud accounting software worth its salt will offer you straightforward ways to run your financial reports and track your important metrics. That’s standard in the new digital world. And this level of reporting gives you real, tangible data on which to base your decision-making. But good decision-making isn’t just about the numbers.

As well as having an effective understanding of your finances, you need a sense of what's good for your business, how decisions will impact on your growth and what your future path looks like.

Run management information at least once a month

Modern cloud accounting software makes it easier than ever to run detailed, up-to-date reporting on your financial position.

With the click of a button, you can run numerous in-depth reports and statements that show your past and future position. Doing this regularly gives you a wealth of financial information on which to base your decision-making and strategic thinking.

At each stage in your business' growth, you’ll have to make important decisions about your next step. So, it’s important to think about the financial implications of any new projects, the amount of cash in your business and the availability of new sources of funding.

Use metrics and projections to inform your decision-making

Setting up a custom dashboard to monitor the most important metrics and key performance indicators (KPIs) is definitely a good idea.

Most accounting apps will let you tailor your dashboard, so you can pick and choose from KPIs that are most relevant to your business.

Set clear and democratic targets for all of your main KPIs and track them on a weekly basis, so you’re monitoring the financial heartbeat of your business.

If cashflow is looking poor, look at freeing up some cash, or borrowing money to fill the gap. If sales revenues are dropping, put some renewed vigour into your sales activity, or get a new marketing campaign underway to raise awareness of your most profitable products and services.

Talk to your board and executive team when scenario-planning

You may be the sole founder of your business, or you may be part of a bigger team of co-founders. But the reality is that no one person can make all the decisions in a busy business.

To get the best overview of a challenge, or to come up with an effective way to grab a potential opportunity, you need to talk to your team – that’s the only way to get an effective consensus.

Talk through the current threats and opportunities and run through as many different potential scenarios as possible. What’s the best-case scenario, and how can you achieve it? What’s the worst-case scenario, and how do you plan for it, if things don’t go according to plan?

Work closely with an experienced external adviser

When you’re working in the business 24/7, it’s hard to see the business in an objective way.

Your judgement on some issues can be overly emotional and clouded by internal or political factors. Working with an experienced accountant, business adviser or business coach brings a fresh perspective to the business – both financially, strategically and emotionally.

Having a trusted external advisor on the team definitely helps you get your numbers straight. But they can also bring their knowledge and experience to bear on your strategic thinking, your decision-making and the impact of the business on your own mental health and wellbeing.

You can open up to them about your worries, share your aspirations for your business and bounce strategic ideas off them – taking some of the pressure off your shoulders.

Track how you’re measuring against your goals

To meet your goals and make good business decisions, it’s helpful to monitor and track your progress against these targets.

If you refer back to your reporting and KPI metrics, you can easily measure your performance over time – and take action if progress is starting to slip.

Areas to keep an eye can include your:

• Cashflow position – to make sure there’s enough cash in the business to keep your project moving forward and heading towards the agreed end goals.
• Sales figures and revenue – so you can see how you’re tracking against your sales targets and if the intended revenue from the project is being achieved.
• Budgets and expenses – to check that you’re not overspending on your project and that the team is being sensible with costs, expenses and essential overheads.
• Gross margin percentage – so you can keep the business profitable and aim to meet your profit targets for the period, or year-end.
  Growth against targets – to keep the business performing well and growing at the rate you predicted to meet your growth target for the period.
• Making a few bad decisions along the way is all part of the learning process. But by monitoring your performance and talking to the best advisers, it’s easier to keep the business on track.

Talk to us about forecasting and understanding your numbers. We’ll help you integrate the best possible management information apps into your business to help guide your decision-making.

Keeping your data safe as a remote worker

Using public WiFi in cafes, hotels and coffee shops is something we all do. It’s convenient and gives you the benefits of working online wherever you happen to be. But are you aware of the data security issues of working from a public network?

In an age where remote and hybrid working are now the norm for so many employees and self-employed people, it’s important to know the key ways to keep your data safe

Secure ways to work from a public network

Remote working is a flexible approach to work that’s increased in popularity hugely over the past few years. A recent study from Buffer found that 97% of people would like to continue working remotely, at least some of the time, for the rest of their career.

Working remotely is here to stay, it would seem. But what can you do to make sure you’re applying the best possible security protocols? And what are the key dangers to look out for?

We’ve highlighted the important elements of cyber safety to be aware of:

Unencrypted public networks and their flaws

A public network isn’t a safe environment when working. When you use your home network, only you and your family have access to the WiFi. If you log into a public network, literally anyone can join the network – and this can lead to all kinds of security issues and concerns.

Malware and other suspicious activity

Hackers and those with malicious intent will see a public network as a potential backdoor to your data. Malware (malicious software), Trojan horses and other hostile programmes can be easily uploaded to your device, allowing hackers to access your programmes, hard drive and data.

Using a personal VPN to access the internet

If you’re using a public network to work, the chances are that you have access to confidential information and customer data via your device. To protect your device, it’s important to use a VPN (virtual private network). This creates a secure network for you, so you can safely share and access your important data, with fewer worries about hackers and malware etc.

Having proper security software on your device

It’s a good idea to also have cyber security software installed on your computer or smart device. Providers like Norton, McAfee and Kaspersky all offer complete internet security suites that include firewalls, regular scans of your drive and other tools to keep your data safe and sound.

Keeping up to date with the latest threats

No security system is 100% safe. But you can do a lot to improve your internet security by being aware of the current threats. Keep an eye out for news stories about cyber breaches and read the updates and social posts from your internet security provider. The more you’re in the loop about present dangers, the more you can do to update your security arrangements and keep your devices safe.

Start improving your internet security

We’ve all enjoyed the additional flexibility and time-saving benefits of working from somewhere other than the office. But as remote working becomes a standard working practice, it’s vital to improve your internet security and be more aware of the potential threats to your data.