Payroll Tax Relief for Businesses under Jobs Plus program (NSW)
Businesses that create at least 30 new jobs in NSW can access payroll tax relief under a Jobs Plus program to be announced in the 2020–21 NSW Budget.
The program will run from 15 December 2020 to 30 June 2022. Businesses can claim payroll tax relief for up to 4 years for every new job where they have created at least 30 new net jobs, either by relocating their head offices or making other expansions or investments in NSW. The program will also aid businesses in other aspects, such as planning, approvals, training programs and infrastructure.
COVID-19: Draft Rules on JobMaker Hiring Credit
The government has released draft rules to establish the JobMaker Hiring Credit scheme to support organisations to take on additional employees through a hiring credit.
The JobMaker Hiring Credit will be available to eligible employers over 12 months from 7 October 2020 for each additional new job they create for an eligible employee, with a maximum amount of $10,400 per additional new position created.
Eligible employers who can demonstrate that the new employee will increase overall employee headcount and payroll will receive $200 per week if they hire an eligible employee aged 16–29 years or $100 per week if they hire an eligible employee aged 30–35 years.
To be eligible, the employee will need to have worked for a minimum of 20 hours per week, averaged over a quarter, and received the JobSeeker Payment, Youth Allowance (other) or Parenting Payment for at least one month out of the three months prior to when they are hired.
Employers need to update payroll processes to apply recent tax cuts
The ATO has now updated the tax withholding schedules to reflect the 2020/21 income year personal tax cuts - the updated schedules are available at ato.gov.au/taxtables.
The ATO has said that employers now need to make adjustments in their payroll processes and systems in order for the tax cuts to be reflected in employee's take-home pay.
Employers must make sure they are withholding the correct amount from salary or wages paid to employees for any pay runs processed in their system from no later than 16 November onwards. Employees should be aware that any withholding on the old scales will be taken into account in their tax return.
JobSeeker supplement extended to March 2021
The payment period of the temporary Coronavirus Supplement has been extended to 31 March 2021.
Existing and new recipients of the JobSeeker payment will receive the supplement at a reduced rate of $150 per fortnight from 1 January 2021 to 31 March 2021, subject to the passage of legislation. The following changes due to cease on 31 December 2020 will also be extended to 31 March 2021:
• expanded eligibility criteria for access to income support payments for permanent employees who are stood down, sole traders and the self employed
• waiver of the Ordinary Waiting Period, Newly Arrived Resident's Waiting Period and the Seasonal Work Preclusion Period.
Win for Small Businesses – 'Loaded Contracts' Crackdown
The Federal government has announced that big business will face new fines and penalties for entering into unfair contracts with consumers and small businesses, under a crackdown agreed to by the Federal and State governments.
This shakeup is aimed at stopping big business squeezing small business partners, such as through changing supply contracts without approvals, suddenly terminating contracts and the auto-renewal of contracts without an agreement and enforcing long lead times to cancel.
The government originally extended an unfair contract term protections for consumers to small business in 2016.
However, the law only allows big businesses to be taken to court to have the relevant terms declared unfair and void. Even if the contract term is proven to be unfair, it is not illegal and there is no penalty to big business.
The Small Business Ombudsman, Kate Carnell, has pressed the government to make unfair contract terms between big and small businesses illegal and subject to penalties. The governments have agreed to strengthen unfair contract term protections.
The shakeup will include making unfair terms unlawful and giving courts the power to impose a civil penalty.
The definition of small business will be expanded from less than 20 employees to less than 100 employees, with an annual turnover test of less than $10 million.
The government's Small Business Ombudsman has indicated that the new small business thresholds would ensure 99% of businesses were covered by the tougher unfair contract rules.
COVID-19 Grants To Become Income Tax Free
In a major change to government policies the Federal government has introduced legislation into parliament that provides for small and medium size business grants, announced on or after 13th September 2020, to be non-assessable, non-exempt income.
Normally, income received by a taxpayer from a government grant is included as assessable income for the recipient.
This change will apply to certain grant programs administered by a State or Territory governments where payments will be treated as non-assessable, non-exempt income so that these payments are not subject to income tax levied by the Commonwealth government.
This grant exemption will only apply to entities with aggregated turnover of less than $50 million per annum.
To be eligible, a business must have received a payment that was made under a Grant program, that is declared by the responsible Cabinet Minister to be eligible for this dispensation and is, in effect, responding to the economic impacts of the COVID-19 coronavirus pandemic.
To be eligible the grant program, from which the payment is made, must first be publicly announced on or after 13th September 2020 and directed at supporting businesses, subject to certain restrictions regarding their operations.
The legislation has been introduced to the House of Representatives but has not yet been passed by both Houses of Parliament.
If you have any questions regarding the proposed legislation, please do not hesitate to contact us.