Payroll management is essential for businesses as it ensures that employees are paid accurately and on time. It also prevents payroll fraud, which can be costly for companies. Effective payroll management improves employee morale and retention – by ensuring you pay your staff correctly and on time, businesses can show their employees that they are valued and appreciated.
Related: Are you Single Touch Payroll Ready?
Changes to the Australian Payroll for the Financial Year 2022
Here is a breakdown of some of the key changes made to payroll in 2022.
1. Increase in NSW payroll tax
The payroll tax rate was reduced to 4.85% for the 2020/21 and 2021/22 financial years. However, since 01st July 2022, this rate has been restored to 5.45%. The payroll tax helps to fund essential services such as education and health care. By increasing the tax rate, the NSW government hopes to encourage businesses to hire more workers and help boost the economy.
2. Important rates and thresholds
From 01st July 2022, the ATO has updated: ETP thresholds, superannuation, and redundancy tax-free amounts. Here are a few changes that you will see:
- The maximum super contribution base is $60,220.
- The super guarantee contribution rate is 10.5%.
- Life and Death Benefit ETP Cap is $230,000.
- The redundancy tax-free part and early retirement scheme payments are $11,591 and $5,797, respectively, for completing each year of service.
These updates will help ensure Australians receive the full benefits of their superannuation and redundancy payments.
3. Changes in Super Guarantee Eligibility
Previously, you didn’t have to pay superannuation for employees who make less than $450 per month. From 01st July 2022, however, this cap is being removed by the federal government – meaning you’ll need to pay super for all employees over the age of 18, no matter how much they worked in a month.
However, employees must meet the necessary requirements to be eligible for these funds. The new law will also extend the current super guarantee amnesty by 12 months to allow employers more time to catch up on their past shortfalls.
If you want assistance with your payroll queries or EOY tax returns, our registered tax agents are here to help. Perth Tax People offer a range of services that will make the process easy and stress-free for you. Contact us at 1300 001 829 to learn more and let us help you through the taxation season.