By Charles Power
In 2018-2019, employers should familiarise themselves with changes commencing 1 July.
While the SGC obligation remains at 9.5% of the employee’s ordinary time earnings, this will apply to the increased base of $54,030 of the employee’s quarterly earnings.
The Superannuation Guarantee (SG) amnesty that has been in place since 24 May 2018 will continue until 23 May 2019. Employers who voluntarily disclose previously undeclared shortfalls in SG contributions during this period will not be liable for the administration component and penalties that may otherwise apply to late SG payments. In addition, they will be able to claim a deduction for catch-up payments made in the 12-month period.
The amnesty applies to previously undeclared SG shortfalls for any period from 1 July 1992 up to 31 March 2018.
Single Touch Payroll reporting starts from 1 July 2018.
Employers with 20 or more employees will gradually start reporting to the ATO from their payroll software each time they pay their employees. Known as Single Touch Payroll or STP, employers will be reporting their employees’ salaries and wages, pay-as-you-go withholding and super information.
If you have 19 or fewer employees, you don’t have to do anything yet. However, you can choose to report through STP if you use payroll software that is STP-enabled. Employers will need to update payroll software for STP.
Taxation of termination payments will attract different thresholds as a result of indexation. The ETP cap amount for the 2018–19 income year will increase to $205,000. Tax-free components of genuine redundancy and early retirement scheme payments in 2018-2019 will be $10,399, plus $5,200 multiplied by the years of service.
From 1 July 2018, the high-income threshold in unfair dismissal cases will increase to $145,400. The relevance of this threshold is:
- If an employee’s annual earnings exceed this threshold and they are not covered by a modern award or enterprise agreement, they will not be able to bring an unfair dismissal claim.
- If an employee’s annual earnings exceed this threshold you will be able to make a guarantee of annual earnings with them and preclude application of any modern award that would otherwise apply.
The compensation limit will be $72,700 for dismissals occurring on or after 1 July 2018. This is the maximum amount of compensation that can be awarded by the Fair Work Commission in an unfair dismissal claim.
From the start of the employee’s first full pay period commencing on or after 1 July 2018, the national minimum wage for award/agreement free employees is $719.20 per week.
Further reduction in penalty rates will apply for award-reliant hospitality and retail employees for hours worked on Sundays as follows:
|Modern award employees||Previous Sunday hourly rate (1 July 2017 to 30 June 2018)||New Sunday hourly rate (1 July 2018 to 30 June 2019)|
|Full-time and part-time employees – GeneralRetail Industry Award 2010 and Pharmacy Industry Award 2010||195% of the base hourly rate||180% of the base hourly rate|
|Casual employees – GeneralRetail Industry Award 2010||195% of the base hourly rate (inclusive of casual loading)||185% of the base hourly rate (inclusive of casual loading)|
|Casual employees – Pharmacy Industry Award 2010||220% of the base hourly rate (inclusive of casual loading)||205% of the base hourly rate (inclusive of casual loading)|
|Full-time and part-time employees – Hospitality Industry (General) Award 2010||170% of the base hourly rate||160% of the base hourly rate|
|Level 1 full-time and part-time employees – Fast Food Industry Award 2010||145% of the base hourly rate||135% of the base hourly rate|
|Level 1 casual employees – Fast Food Industry Award 2010||170% of the base hourly rate (inclusive of casual loading)||160% of the base hourly rate (inclusive of casual loading)|