Here is a run-down of the key changes taking effect from 1 July 2023 that are likely to have an impact on small business owners in Western Australia.
New minimum wages
The minimum wages for both the federal and state industrial relations systems will increase from the first pay on or after 1 July 2023.
National minimum wage increase
If your business operates under the federal industrial relations system (covering businesses such as ‘Pty Ltd’ companies), the new national minimum wage will be $882.80 per week or $23.23 per hour. This rate takes affect from the first full pay period starting on or after 1 July 2023.
The national minimum wage increase covers all modern awards, unless exceptional circumstances exist (for example in sectors such as aviation, tourism and hospitality).
Visit the Fair Work website for more information about the national minimum wage increase.
State minimum wage
If your business operates under the WA state industrial relations system (covering sole traders, micro businesses, unincorporated partnerships and unincorporated trust arrangements), the new minimum wage will be $863.40 per week or $22.72 per hour.
Super guarantee rate increase
The super guarantee rate will increase from 10.5 per cent to 11 per cent on 1 July 2023. This change is part of incremental increases that will see the rate increase by 0.5 per cent annually until it reaches 12 per cent on 1 July 2025.
The rate of 11 per cent will need to be applied to all salary and wages paid on and after 1 July 2023, even if some or all the pay period it relates to is before 1 July 2023.
Visit the Australian Taxation Office (ATO) website for details of future increases to the super guarantee.
Changes to paid parental leave
The existing paid parental leave entitlement (18 weeks) will be combined with the dad and partner pay entitlement (2 weeks) to provide partnered couples with the ability to claim up to 20 weeks of paid parental leave between them.
If you are a single parent at the time of your claim, you can access the full 20 weeks of paid parental leave.
Visit the Fair Work Ombudsman website to find out more.
Location allowance for employees in regional areas
You may be required to pay a location allowance if you have employees in certain regional towns and employ those staff under the WA industrial relations system. Visit the Wageline website for information on the new rates for each town and details of the wage awards this allowance applies to.
Federal Budget commitments
As part of the 2023-24 Federal Budget, the Australian Government announced the following measures which take effect from 1 July 2023.
Increase to instant asset write-off
Eligible small business owners can deduct up to $20,000 per business asset/resource for the 2023-24 tax year using the instant asset write-off. These purchases must be installed and ready for use in your business between 1 July 2023 and 30 June 2024. Visit the ATO website to find out more.
Temporary full expensing ends
From 1 July, Temporary full expensing will no longer be in effect for the 2023-24 tax year.
PAYG and GST uplift
PAYG and GST uplift rates will be set at 6 per cent for the 2023-24 financial year instead of the 12 per cent that would have applied under the statutory formula. Visit the ATO website to find out more.
Small Business Energy Incentive
This tax incentive will provide an additional 20 per cent tax deduction (up to $20,000) for eligible assets that support electrification and more efficient energy use.
This incentive does not apply to electric vehicles. Visit the ATO website to learn more.
Increase to temporary skilled migration income threshold
The Temporary Skilled Migration Income Threshold (TSMIT) has been increased from $53,900 to $70,000, which will increase the cost for small businesses bringing in overseas workers. Visit the Home Affairs website to find out more.
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