Key changes FY 2023-24

Some significant changes will impact your financial landscape this new financial year. In this blog, we’ll outline the key updates that you should be aware of:

Minimum wage increases

The Fair Work Commission has recently announced its decision regarding minimum wage increases. Starting from this financial year 2023 – 24, wages will rise as follows:

  • The minimum wage for award-free employees will be $23.23 per hour or $882.80 per week, representing an increase of $70.20 or 5.75%.
  • Minimum award rates for award-covered employees will also increase by 5.75%.

The new National Minimum Wage will take effect from the first full pay period starting on or after 1 July 2023. For example, if your weekly pay period starts on Monday, the new rates will apply from Monday, 3 July 2023.

It’s crucial to update your pay practices to ensure compliance with the new minimum wage rates. Additionally, don’t forget to review employees on annualised salaries, as the significant award increase may necessitate adjustments to ensure proper coverage of award entitlements. Furthermore, when conducting salary reviews, remember to consider the increase in employee super payments below.

Income tax return

The income tax rates for the 2022–23 and 2023–24 income years remain unchanged.

The rates are as follows:

  • Up to $18,200: No tax
  • $18,201–$45,000: 19%
  • $45,001–$120,000: 32.5%
  • $120,001–$180,000: 37%
  • $180,001 and over: 45%

Stage 3 tax cuts will be implemented from 2024–25, simplifying the rates.

The Low and Middle Income Tax Offset was not extended by the Government. This means individuals who received up to $1,500 in extra tax refunds last year will not receive them again in 2023. So your tax return

Superannuation Guarantee increases to 11%

One of the most prominent changes affecting you this year is the increase in the Superannuation Guarantee rate. As of 1 July 2023, the rate jumps from 10.5% to 11%, with further annual increments of 0.5% scheduled until it reaches 12% by 1 July 2025.

If your employees are on a “total remuneration” package, which includes superannuation, their take-home pay will decrease by 0.5% unless you, as the employer, choose to augment their total remuneration by the same amount. However, for employees on wages or salary plus superannuation, their take-home pay remains unaffected while the 0.5% increase is channeled into their super contributions.

Employers must promptly address this change and factor it into their cash flow planning for the 2023/2024 fiscal year.

Cryptocurrency Taxation

The ATO is closely monitoring the taxation of cryptocurrency gains. It’s crucial to understand that gains from cryptocurrency transactions, just like gains from other investments, such as shares, are subject to capital gains tax (CGT) and must be duly reported. This includes actions like buying, selling, swapping for fiat currency, or exchanging one cryptocurrency for another. Additionally, the disposal of non-fungible tokens (NFTs) also attracts CGT.

Maintaining meticulous records of your cryptocurrency exchanges is of utmost importance, as the ATO has access to data from crypto platforms and banks and conducts data matching to ensure proper taxation of all crypto gains.

Given the complexity of tax laws in this area, seeking professional advice is highly recommended to ensure compliance.

Learn more: When cryptocurrency is taxable

Temporary full expensing replaced with $20,000 instant asset write-off

The temporary full expensing provision, which allowed unlimited tax deductions for business asset purchases, concludes on 30 June 2023. From 1 July 2023, businesses can instantly write off assets with a cost of less than $20,000. However, assets exceeding this value will be subject to depreciation.

If you previously claimed the full cost of an asset under temporary full expensing, such as a motor vehicle, the entire sale price will be included in your taxable income for the year when you sell it in the future.

As we step into the new financial year, it’s crucial to be aware of these key changes and take the necessary steps to ensure compliance and optimal financial management. Reach out to our KMT tax experts for tailored advice on navigating these updates and maximising your financial opportunities in the year ahead.

This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek tax advice from a qualified accountant at KMT Partners. Information is current at the date of issue and may change.