Interest Offset Accounts
If you have cash invested and earning say 2%, on which tax is payable, and you also have a home loan incurring interest at say 6%, on which no tax deduction is claimed, use of an interest offset account will improve the return on the cash and also save you tax. As an example a $10,000 balance in an offset account could generate an annual saving as high as $493 or 4.93%. Whilst charges will apply for such accounts, why not consider making your cash work harder for you.
If you have an interest deductible loan, such as a loan for a rental property, interest offset accounts can provide a significant advantage where you have personal savings that you would otherwise apply against the loan. Savings for home improvements, a holiday, a new car, helping hand to children etc, when applied against your deductible loan will result in the ATO treating the deductible loan balance as being paid down to that lower value and prevent that component from ever being brought back to the original level. Should you later redraw the funds the character of this later loan will not satisfy the test for tax deductibility. This is because the ATO will only allow a claim if the principal was borrowed for income producing purposes. Drawing funds for personal expenditure or a private asset would not satisfy this test. As an example if a deductible loan of $100,000 is repaid to the extent of $20,000, which is later drawn back for private expenditure, the future debt will from them on only give rise to tax deductible interest to the extent of 80%.
To avoid these issues, interest offset loans can be very effective. Please call if you have any questions or need assistance with finance.
Finding The Right Balance With Team Members
Employers need to be mindful of boundaries with their employees. Employers should be encouraging respect between colleagues, but at the same time, acknowledge different tendencies exist amongst people. Some people crave to be liked and enjoy the social side of working. Others don't see it that way, it's not part of their priority, they want to focus on the challenges and things that are stimulating. Employers need to be aware of these differences and, at the same time, be conversant with the employment laws. Employers need to find the right balance between being professional and friendly. This goes to the heart of business and the management style employed by an employer.
When someone joins an organisation, it is a good idea to have a conversation with the new team member, with at least another team member present, to explain to the new team member the job and what is expected from their performance. This will also enable the employer to hear the expectations from the new team member (eg. what do they want from the job). The employer should also explain what is acceptable behaviour and what is the culture of the business.
The process that the business has instigated for the raising of complaints and issues, should also be explained to the new team member. The internal process, which relates to performance reviews, should also be explained to the new team member, so that there is no misunderstanding of the reasons for performance reviews.
Employers should be conscious of the employment rules, as ignorance is no excuse.