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Superannuation Guarantee Rises to 12%

Wed, 02 Jul 2025 05:28:53 GMT

What does this mean for Employers and Employees?

As the new financial year approaches, Australian businesses and workers should prepare for an important change in the way superannuation is calculated. From 1 July 2025, the Superannuation Guarantee (SG) rate will increase from 11.5% to 12%, marking the final step in a series of planned increases that began over a decade ago.

This change is part of the government’s long-term strategy to improve retirement outcomes for Australians. By gradually increasing the SG rate, the aim is to ensure that workers accumulate more savings throughout their careers, helping them achieve greater financial security in retirement.

For employers, this means adjusting payroll systems to reflect the new rate. Any payments made to employees on or after 1 July must include super contributions calculated at 12% of their ordinary time earnings.

While the change may slightly increase costs for employers, it’s a positive move for employees. Over time, the additional contributions can make a significant difference to retirement balances, especially when compounded over decades.

To stay compliant, employers should review employment contracts, update payroll software, and communicate the change clearly to staff. The Australian Taxation Office (ATO) provides tools and calculators to help businesses ensure they’re meeting their obligations.

The next SG payment due date is 28 July 2025, so now is the time to prepare. By taking proactive steps, bus inesses can ensure a smooth transition and support their employees’ financial futures.

RBA Cuts Interest Rates

Tue, 18 Feb 2025 22:44:39 GMT

What It Means for You and Your Finances

The Reserve Bank of Australia (RBA) has announced its first interest rate cut in over four years, lowering the cash rate by 25 basis points to 4.1%. This decision comes as inflation shows signs of easing, and economic conditions begin to stabilise. While this move provides relief to borrowers, the RBA remains cautious about future adjustments, carefully balancing economic growth with inflation control.

Why the RBA Made This Decision

After a prolonged period of rising interest rates aimed at curbing inflation, recent data suggests that inflation is gradually returning to the target range of 2–3%. With cost-of-living pressures still impacting households and businesses, the RBA's decision to ease rates is designed to provide some financial relief while ensuring economic stability. However, policymakers have made it clear that this is not necessarily the start of a long series of rate cuts, as they continue to monitor employment levels, wage growth, and spending patterns.

How This Impacts Borrowers

For mortgage holders and businesses with loans, this reduction means lower repayments and the potential to free up cash flow. Many major banks have already announced they will pass on the full rate cut, making it an excellent time to review existing loans and refinancing options.

What It Means for Savers and Investors

While lower interest rates benefit borrowers, savers may see reduced returns on deposit accounts. This shift encourages investors to explore alternative options, such as shares, property, or superannuation contributions, to maximize their returns. Reviewing your investment strategy in light of these changes can help ensure your money is working efficiently for you.

What’s Next?

The RBA has signaled a cautious approach moving forward, meaning additional rate cuts will depend on economic conditions. If inflation remains under control and growth stabilizes, we may see further adjustments later in the year. However, with ongoing global economic uncertainties, it's essential to stay informed and plan ahead.

How We Can Help

Understanding how interest rate changes affect your financial position is crucial. At TJL Business Advisors & Accountants, we’re here to help you navigate these shifts, whether it’s reviewing your cashflow, planning investments, or optimising your financial strategy. Get in touch with our team today to discuss how this rate cut impacts you and explore the best financial moves for your future.

Sources: ( Money Management ); ( IFA ); ( Accountants Daily )

Winning the Long Game

Tue, 21 Jan 2025 23:17:15 GMT

What Tennis and Investing Have in Common

In the world of investing, even having just a marginal winning percentage can lead to long-term success. As the Australian Open heats up, there are some similarities between the world of tennis and the stock market:

Take Roger Federer, 103 singles titles and a true great of the game. He amassed his titles by winning just 54% of the points he played, this resulted in him winning 76% of sets and being triumphant in 82% of matches he played. Amazingly, there is a similar pattern in the stock market.

Since 1990, the S&P 500 Index has closed higher on 54% of trading days, leading to 72% of quarters being positive and 82% of years finishing in the black.

What’s the message? You don’t have to win every point to be Roger Federer. You also don’t need to win every day on the stock market to have a successful investment experience. The ups and downs are inevitable however a focus on long term goals can ensure that your chances of achieving your success are as great as ever.

Past performance is no guarantee of future performance. This article is information only and no account has been taken of the needs for any particular person. All information is given in good faith and without warranty and should not be considered financial product advice or an offer of any financial product for sale.

5 Questions to Ask Your Accountant When Starting a Business in Australia

Fri, 14 Jun 2024 07:13:22 GMT

Starting a business is an exciting journey filled with opportunities and challenges. One of the most crucial aspects of establishing a successful business is ensuring your financial foundations are solid. This is where an accountant comes in. An accountant can provide invaluable advice and support, helping you navigate the complexities of business finance. If you're in the early stages of your entrepreneurial venture, here are five essential questions to ask your accountant to set your business on the path to success.

1. What Business Structure Should I Choose?

Choosing the right business structure is one of the first and most critical decisions you will make. The structure you select will impact your taxes, personal liability and regulatory obligations. In Australia, common business structures include sole trader, partnership, company and trust.

A sole trader structure is the simplest and cheapest to set up. However, it means you are personally liable for all business debts and obligations. This structure might be suitable for small, low-risk businesses.

A partnership involves two or more people who run the business together. This structure can share the burden of responsibilities and liabilities, but each partner is jointly and severally liable for the business's debts. It's crucial to have a clear partnership agreement in place to avoid disputes.

A company is a separate legal entity, which means it can incur debts, sue and be sued independently of its owners. This structure offers limited liability protection to its shareholders but involves more regulatory requirements and higher setup costs.

A trust involves a trustee holding business assets for the benefit of others (beneficiaries). This structure can offer tax advantages and asset protection but is more complex and expensive to establish and maintain.

Your accountant can help you understand the pros and cons of each structure and recommend the one that aligns best with your business goals and circumstances.

2. How Can I Maximise My Tax Deductions?

Tax deductions can significantly reduce your taxable income, freeing up more funds for reinvestment in your business. However, navigating the intricacies of tax law can be challenging without professional help. Your accountant can guide you on the types of expenses you can claim as deductions, such as business-related travel, equipment purchases and operating expenses.

It's essential to keep thorough records of all business expenses to substantiate your claims. Your accountant can also advise on timing your deductions to maximise benefits. For example, prepaying some expenses before the end of the financial year can bring forward deductions, reducing your taxable income in the current year.

Moreover, an accountant can help you take advantage of available tax concessions, such as the instant asset write-off, which allows businesses to immediately deduct the cost of eligible assets. Keeping abreast of changes in tax legislation is crucial, and a good accountant will ensure you don't miss out on any opportunities.

3. What Are My Obligations Regarding GST and BAS?

In Australia, businesses with a turnover of $75,000 or more must register for the Goods and Services Tax (GST). Once registered, you need to add 10% GST to your prices and regularly lodge Business Activity Statements (BAS) to report your GST collected and paid.

Your accountant can assist with the initial GST registration and ongoing BAS lodgement, ensuring you meet your reporting obligations and avoid penalties. They can also help you understand how GST applies to your business operations, including which transactions are subject to GST and which are exempt.

Additionally, your accountant can advise on managing your cash flow to accommodate GST payments, which can be substantial. Proper planning and regular monitoring of your GST obligations can prevent cash flow issues and ensure your business remains compliant.

4. How Should I Manage My Cash Flow?

Cash flow is the lifeblood of any business. Even profitable businesses can fail if they run out of cash to pay their bills. Effective cash flow management involves forecasting, monitoring and controlling the inflow and outflow of cash.

Your accountant can help you create detailed cash flow forecasts, identifying periods when your business might experience cash shortages and advising on strategies to manage these situations. They can also recommend practices to improve cash flow, such as shortening payment terms for customers, negotiating longer payment terms with suppliers and maintaining a cash reserve for emergencies.

Furthermore, an accountant can provide insights into financing options, whether it's securing a business loan, line of credit or other financial products. They can help you weigh the pros and cons of each option and choose the one that best suits your business needs.

5. What Financial Metrics Should I Monitor?

Tracking the right financial metrics is crucial for assessing your business's performance and making informed decisions. Your accountant can help you identify key performance indicators (KPIs) relevant to your industry and business model. Common KPIs include:

-Gross Profit Margin: Measures the difference between sales and the cost of goods sold, expressed as a percentage of sales. It indicates how efficiently your business is producing or sourcing its products.

-Net Profit Margin: The percentage of revenue remaining after all expenses have been deducted from sales. It reflects your business's overall profitability.

-Cash Conversion Cycle: The time it takes for your business to convert inventory and other resources into cash from sales. A shorter cycle indicates efficient cash flow management.

- Current Ratio: A liquidity ratio that measures your business's ability to meet short-term obligations with its current assets. A ratio above 1 indicates good liquidity.

By regularly monitoring these metrics, you can identify trends, spot potential issues early, and make strategic adjustments to improve your business's financial health.

Professional Support for Your Business Journey

Starting a business is a significant undertaking that requires careful planning and informed decision-making. By asking the right questions and leveraging the services of a qualified accountant, you can build a strong financial foundation for your business.

If you're looking for professional accounting services in Forster, Taree or Sydney, TJL Business Advisors & Accountants can provide comprehensive support tailored to your business needs. Contact our business advisors in Forster today to schedule a consultation and take the first step towards securing your business's financial future.

Increase Your Super Contributions: Essential Updates for Retirement Planning

Tue, 28 May 2024 01:04:32 GMT

As part of your financial planning strategy, recent changes to superannuation contribution caps offer new opportunities to maximise your retirement savings. Effective from 1 July 2024, the concessional (pre-tax) contribution cap has been increased to $30,000. This allows for more significant tax-effective contributions to your superannuation fund. Additionally, for those looking to make after-tax contributions, the non-concessional contribution cap has been raised to $120,000 annually. Individuals under 75 years old can also take advantage of the bring-forward rule, allowing them to contribute up to three years’ worth of caps in a single year, thus accelerating their retirement savings.

These updates provide a strategic advantage for those aiming to bolster their superannuation in preparation for retirement. By maximising both concessional and non-concessional contributions, you can benefit from potential tax savings and increase your retirement nest egg. It’s crucial to stay informed about these changes and adjust your financial plans accordingly to ensure a comfortable and secure retirement. For more detailed information, visit the ATO’s official page on contribution caps .

Superannuation Going to 11.5%

Fri, 03 May 2024 01:12:07 GMT

Steady Increase in the Super Guarantee (SG)

The Super Guarantee (SG), which mandates the percentage of an employee’s earnings that employers must contribute to their super fund, has been set to rise steadily in the coming years. Starting from 1 July 2024, the SG will increase from the current rate of 11% to 11.5%, with an eventual increase to 12% on 1 July 2025. This increase follows the previous trajectory set out by the government to bolster retirement savings for Australians.

Impact on Employees

For employees, this increase means a larger portion of their income will be going into their superannuation fund. This helps to boost their retirement savings and ensures a more secure financial future. Given the power of compound interest, these small increases in super contributions can add up significantly over the course of a worker’s career, providing a strong safety net in retirement.

New Requirements for Employers

Another significant change coming is the requirement for employers to pay employees’ super contributions at the same time as their salary and wages. This new rule will take effect from 1 July 2026 and aims to address the persistent issue of unpaid super, which amounts to approximately $5 billion annually. By aligning the timing of super payments with salary payments, employees will be better able to keep track of their super contributions and identify any discrepancies more easily.

New Tax Cuts to Help with the Cost of Living

Mon, 25 Mar 2024 01:16:08 GMT

The Australian government has unveiled plans in a Media Release to implement tax cuts effective from July 1, aimed at providing relief to taxpayers across the country. These tax adjustments are intended to address cost-of-living concerns and ensure that Australians retain more of their earnings.

Key features of the tax cuts include:

Reduction of the 19% tax rate to 16% for incomes between $18,200 and $45,000.
Reduction of the 32.5% tax rate to 30% for incomes between $45,000 and the new $135,000 threshold.
Increase of the threshold for the 37% tax rate from $120,000 to $135,000.
Increase of the threshold for the 45% tax rate from $180,000 to $190,000.

The tax cuts are projected to provide substantial relief, with an average income earner receiving a $1,504 tax cut, $804 more than under previous plans. Those earning $40,000 will receive a $654 tax cut, compared to none under previous plans, while those earning $100,000 will receive a $2,179 tax cut.

The government emphasizes that these tax cuts are designed to be fiscally responsible, supporting economic growth, and addressing the needs of Australian taxpayers.

Find out how much you will save from the tax cuts: Tax Cut Calculator

Agent Nomination Process

Wed, 14 Feb 2024 01:32:31 GMT

The Australian Taxation Office is further strengthening the security of their online services to help protect against fraud and identity-related theft.

Therefore, all types of entities with an ABN (excluding sole traders) that are a new client to TJL will need to nominate TJL Business Advisors & Accountants as their agent before they can be added to TJL’s client list with the Australian Taxation Office.

Please see below information for a step by step guide on how to perform this task.

If you have any queries please do not hesitate to contact our office on 6554 9511 or email info@tjlbiz.com.au

Do you have access to Online services for business?

Yes > Go to step 3.
No > Go to step 1.

Before you start Step 1 & 2

To complete step 1-2 you must be the principal authority

This is the person responsible for the business and must be the first person to set up access to Online services for business. If you’re not sure what role you have, see Get started .

STEP 1: Set up your Digital ID (myGovID)

Download the myGovID app, available from the App Store or Google and follow these instructions on how to set up your myGovID .

Choose your identity strength:

A Strong myGovID – by verifying your Australian passport and either birth certificate, citizenship certificate, driver licence or Medicare card.
A Standard myGovID – by verifying 2 Australian identity documents. With a Standard myGovID you will need to contact the ATO to complete Step 2.

STEP 2: Link your myGovID to your ABN

You’ll need to link your myGovID to your Australian business number (ABN) using Relationship Authorisation Manager (RAM)External Link .

If you have a Strong myGovID go to RAM and log in. Select Link your business and follow the prompts.

You’ll need to contact the ATO to complete this step if you:

have a Standard myGovID
are a primary person – this is a type of principal authority who’s not listed as an individual associate in the Australian Business Register. For example, the authorised contact of a government entity.

STEP 3: Log in to Online services for business

Use your myGovID to log in to Online services for business

Step 4: Nominate your authorised agent in Online services for business

To complete this step you’ll need your agent’s (or payroll service provider’s) registered agent number.

From the Online services for business home page:

select Profile , then Agent details
at the Agent nominations feature, select Add
on the Nominate agent screen, go to Search for agent
type your agent’s (or payroll service provider’s) registered agent number and select Search
select the agent you want to nominate
check that the agent’s details are correct
complete the Declaration
select Submit .

You’ll now see your agent’s details listed under Agent nominations.

STEP 5: Let your agent know you have nominated them

The agent you nominate won’t receive an automated system notification. It’s important to let them know when you’ve completed the nomination step.

Your agent has 28 days to action the nomination before it expires.

Having Trouble Doing This Electronically?

If you cannot electronically approve TJL as your registered agent you can call the ATO on 13 28 66 and select option 1.

You will need to provide the following personal details for the related entity along with TJL’s Registered Tax Agent Number

– TFN or ABN

– DOB

– Name

– TJL’s Registered Tax Agent Number – 25 225 475

Once again, if you have any queries please do not hesitate to contact our office on 6554 9511 or email info@tjlbiz.com.au

Navigating the Proposed Changes to Stage 3 Tax Cuts: What Business Owners Need to Know

Tue, 13 Feb 2024 01:50:10 GMT

Confusion has surrounded the stage 3 tax cuts, initially approved by the Morrison Government, with Anthony Albanese pledging to maintain them if victorious in the 2022 election. However, recent modifications have altered the landscape, leading to a shift in who benefits from these changes. In this post, we’ll break down the pre-changes scenario, the proposed new plan, and what business owners should consider in light of these adjustments.

Pre-Changes Overview:

The original stage 3 tax cut plan was skewed towards higher-income individuals, offering minimal benefits to those earning less than $45k. The majority of savings were expected to flow to individuals earning over $120k, representing the top 14% of income earners in Australia. This setup prompted discussions about equity and fairness within the tax system.

The Proposed New Plan:

The proposed changes aim to redistribute the tax burden, particularly benefiting individuals earning the minimum wage or less (around $45k). Taxpayers within the $45k to $135k income range stand to gain the most, with estimates suggesting an increase of $800 to $930 compared to the initial plan. While high-income earners won’t receive as substantial returns as outlined in Scott Morrison’s plan, they will still contribute less in taxes compared to the prior arrangement. This adjustment seeks to create a fairer distribution of tax benefits.

What Business Owners Should Do:

As a business owner, it’s crucial to navigate these changes strategically. Engaging with your accountant for tax planning advice before June 30, 2024, is highly recommended. This proactive approach offers clarity on your tax outcome and provides the best chance to minimize tax before the end of the financial year. Additionally, it sets the stage for planning the 2025 financial year, where most of these changes will take effect. Being informed and proactive will empower you to make well-informed financial decisions for your business.

The evolving landscape of stage 3 tax cuts underscores the importance of staying informed and seeking professional advice. Business owners, in particular, should be proactive in engaging with their accountants for strategic tax planning. By doing so, they can navigate the changes effectively, optimise their financial outcomes, and position themselves for success in the upcoming financial year.