Highlights


The JobMaker Hiring Credit

19/01/2021

Employers now have more incentive to employ workers under 35! The JobMaker Hiring Credit legislation has now been passed into law!

This credit was part of the 2020-2021 Budget, which will operate until 6 October 2022.  It is designed to improve the prospects of young individuals getting employment following the devastating impact of COVID-19 on the labour market.

Commencement

The scheme will be backdated to commence on 7 October 2020 and provide eligible employers with the following payments for up to 12 months for new jobs created for which they hire the following young workers;

  • $200 a week for hiring a worker aged 16 to 29 for at least 20 hours a week
  • $100 a week for those aged 30 to 35

Although the scheme is slated to run for just 12 months, that period is the hiring period - not the payment period.

Eligible employers who hire an employee as late as the last day of the scheme (6 October 2021) may be eligible for hiring credits for the subsequent 12 months until 6 October 2022.


For more information please contact us alternatively below is the link to the ATO

https://www.ato.gov.au/General/JobMaker-Hiring-Credit/?=redirected_jobmakerhiringcredit

Jobkeeper Second Extension Period

02/01/2021

Whether you’re looking to lodge your JobKeeper monthly business declaration for December payments, or apply for the second JobKeeper Payment extension period, here are a few things you need to know.

Lodging the December monthly business declaration

For this month only, you can lodge your monthly declaration between 4 to 28 January 2021.

The declaration covers JobKeeper fortnights 18, 19 and 20 (23 November 2020 to 3 January 2021).

Applying for the second extension period

From 4 January 2021, you’ll be able to access and submit the new decline in turnover form to determine your eligibility for the second Jobkeeper Payment extension period. The second extension runs from 4 January 2021 to 28 March 2021.

Once you meet the decline in turnover test, to claim for JobKeeper fortnights 21 and 22 (4 to 31 January 2021) you’ll need to pay your eligible employees by 31 January 2021.

Christmas Parties & Gifts - The Tax Truths 

Gifts to Staff

01/12/2020

Christmas is traditionally a time of giving - including employers showing gratitude towards staff and clients/suppliers for their loyalty throughout the year.  With the right approach, it is possible to enjoy some tax benefits out of your generosity, and also avoid Fringe Benefits Tax (FBT). But as always with tax, the landscape is layered with complexity. The following is a general summary of the tax treatment of Christmas giving.


Gifts to Staff

Non-entertainment gifts to staff (such as Christmas hampers, bottles of alcohol, gift vouchers, pens sets etc.) are tax deductible and you can claim GST credits, irrespective of cost. Note however that you can generally avoid FBT if you keep the gift under $300.  If this threshold is exceeded, FBT will apply. Therefore, be conscious of this threshold when providing such gifts to staff this Christmas.


Entertainment gifts to staff (such as tickets to movies/theatre/amusement parks/sporting events, holiday airline tickets etc.) which are under $300 will not attract FBT, but are not income tax deductible, and you can not claim GST credits. If over $300, FBT will apply, but a tax deduction and GST credits can be claimed.  With FBT rate sitting at 47% the tax deduction and GST credits  available is unlikely to provide a better tax outcome than avoiding FBT by keeping the gift under $300.


Christmas Parties & Gifts - The Tax Truths

Gifts to Clients/Customers/Contractors/Suppliers

01/12/2020

No FBT is payable, irrespective of the type of gift and irrespective of cost.  However, where a gift constitutes entertainment, no GST or tax deduction can be claimed.  Thus, at least from a tax standpoint, it's better to provide non-entertainment gifts to clients (Christmas hamper, bottles of alcohol, gift vouchers, pen sets) and, in doing so, enjoy a tax deduction and GST credits.

Christmas Parties & Gifts - The Tax Truths

Christmas Parties

01/12/2020

Instead of (or as well as) gifts, it's quite common for employers to host a Christmas Party for their staff (often including spouses) at a restaurant.


Where this is the case, the total cost will generally be exempt from FBT provided the per-head cost (dinner and drinks) is kept to under $300 per person.  This is known as the Minor Benefits Exemption.  To enjoy this exemption the employer must use the Actual Method for valuing FBT meal entertainment.  The Actual Method is the default method for valuing meal entertainment, and no formal ATO election is required to use this method.  Under the Actual Method, an employer pays FBT (in the absence of an exemption) on all taxable meal entertainment provided to employees and their associates such as spouses.

The downside of using the Minor Benefit Exemption is that the meal entertainment is not tax deductible, nor can you claim a GST credit.


This Minor Benefit Exemption is not available if you elect to value your meal entertainment under the alternative 50/50 Method.  Under this method, you pay FBT on only 50% of all taxable meal entertainment provided to employees, spouses AND clients, contractors, customers etc. irrespective of the cost.  Likewise, you only claim a 50% income tax deduction and 50% GST credits on such meal entertainment.  However as stated earlier, with the FBT rate now at 47% the 50% tax deduction and 50% GST credits available under the 50/50 Method is unlikely to provide a better after-tax result that the Actual Method where by FBT is payable.


The "take-home message" is that if like many employers the only social functions you host for employees during the year are a Christmas Party (and perhaps the Melbourne Cup), be conscious of keeping the per-head cost under $300. By doing so you may be able to exempt the entire cost of the party from FBT.