The start of each financial year usually brings with it a host of tax changes that SMEs need to be aware of, as well as a range of other regulatory changes that affect large sections of the Australian business community. From an increase in the national minimum wage and superannuation guarantee to changes to parental leave entitlements and migration rules, there’s plenty for business owners to get their heads around as the 2023-24 financial year begins.

Here’s a quick guide to the key changes your business needs to be aware of.

  1. Minimum wage increase

Australia’s minimum wage will increase to $882.80, or $23.23 per hour, from July 1. The new National Minimum Wage will apply to employees who aren’t covered by an award or registered agreement, starting from the first full pay period on or after July 1. If your business’ weekly pay period starts on a Monday, this means the new rates will apply from Monday, July 3, 2023.

Modern award minimum wages will also rise by 5.75%, with the overall changes estimated to affect the wages of around a quarter of Australian employees.

  1. WA State Minimum Wage

If your business operates under the WA state industrial relations system (covering sole traders, micro businesses, unincorporated partnerships and unincorporated trust arrangements), the new minimum wage will be $863.40 per week or $22.72 per hour.

  1. Location allowance for employees in regional areas

You may be required to pay a location allowance if you have employees in certain regional towns and employ those staff under the WA industrial relations system. Visit the Wageline website for information on the new rates for each town and details of the wage awards this allowance applies to.

  1. Superannuation guarantee rate

The amount of superannuation employers need to pay their employees will also change on July 1, due to a scheduled increase in the superannuation guarantee (SG) rate. The SG rate will increase from 10.5% to 11% on July 1, 2023, and is legislated to increase further to 12% by 2025.

Employers will need to use the new rate to calculate super payments on or after July 1, even if some or all the pay period covers work that was done before July 1.

  1. Changes to asset depreciation rules

The Temporary Full Expensing regime has ended on July 1, with immediate deductions on business expenses reverting to the Instant Asset Write-Off model. Under the new Instant Asset Write-Off limits, businesses with an annual turnover of less than $10 million will be free to claim an immediate tax deduction on assets up to $20,000 in value.

The scheme will operate on a per-asset basis, meaning businesses can write off multiple assets at once. Assets costing $20,000 or more can still be placed in the small business simplified depreciation scheme, providing deductions of 15% in the first year, and 30% each year after.

  1. Small Business Energy Incentive

PAYG and GST uplift rates will be set at 6 per cent for the 2023-24 financial year instead of the 12 per cent that would have applied under the statutory formula. Visit the ATO website to find out more.

  1. Energy bill relief 

The federal government has promised energy bill relief to eligible small businesses from July 1. Co-contributions from some states and territories mean some small businesses will receive energy bill relief of up to $650. That relief will be automatically applied to power bills; however, power usage thresholds vary between states and territories. This tax incentive will provide an additional 20 per cent tax deduction (up to $20,000) for eligible assets that support electrification and more efficient energy use.

This incentive does not apply to electric vehicles.

  1. Migration changes

Employers looking to sponsor a temporary skilled migrant must pay them more than the Temporary Skilled Migrant Income Threshold (TSMIT). That limit is designed to prevent migrant worker exploitation and keep employers from undercutting the wages offered to Australian workers.

The TSMIT has been $53,900 since 2013, but it will lift to $70,000 on July 1 this year.

  1. Cap on international worker hours

To ensure businesses could find staff in a COVID-depleted economy, the 40-hour-a-week cap for student visa holders was relaxed early in the pandemic and suspended entirely in January 2022. It returns on July 1 with a new limit of 48 hours of work per fortnight. Businesses that employ student visa holders should consider how the new cap affects their hiring plans.

  1. Unfair dismissal high-income threshold

There are certain limits to which employees can file for an unfair dismissal claim. The Fair Work Commission states that workers not covered by a modern award or a relevant enterprise agreement must earn below a certain income threshold for unfair dismissal claim eligibility.

Currently that threshold is $162,000 per annum. It will rise on July 1, 2023, to $167,500. The compensation limit for those claims will also rise to $83,750, equal to half of the high-income threshold, for dismissals occurring on July 1 or afterwards.

  1. Fair Work Commission fees

Paperwork fees at the Fair Work Commission will also rise through indexation on July 1. From that date, the application fee will increase to $83.30. The Fair Work Commission says that covers applications related to dismissal, general protections, and bullying and sexual harassment at work.

Note: There is no fee to make an application to deal with a sexual harassment dispute under section 527F of the Fair Work Act,”.

  1. Parental leave

From July 1, the current entitlement to 18 weeks of paid parental leave will combine with the current Dad and Partner Pay entitlement of two weeks’ pay. The new 20-week paid parental leave entitlement can be shared between partnered parents, while single parents will be entitled to the full 20 weeks themselves. The change will affect parents whose child is born or is placed in their care, on or after July 1, 2023.

The 20 weeks can be claimed in separate blocks too, which means parents can take multiple parental leave breaks before their child turns two years old.

  1. Sharing Economy Reporting Regime

Starting on July 1, the Australian Taxation Office (ATO) will begin collecting data from accommodation booking platforms and rideshare apps as part of the new Sharing Economy Reporting Regime.

The ATO will then match data from those gig and shared economy platforms against individual tax returns, to ensure people who earn income through holiday leases or rideshare work pay the correct income tax.

The rules will eventually cover more electronic distribution platforms: websites, apps, or marketplaces that allow sellers to make their supplies available to customers, and facilitate purchases directly through the platform itself.That includes accommodation booking platforms or rideshare apps. “Reporting begins for all other reportable transactions made from July 1, 2024,” the ATO says.

  1. Business name and company name registration fees

A number of company fees and business name fees will rise on July 1, in keeping with indexation. The cost of registering a company will rise 7% from $538 to $576, according to the Australian Securities and Investment Commission (ASIC). The cost of reserving a company name will jump from $55 to $59. Simultaneously, business name registration or renewal for one year will rise from $39 to $42.

  1. Small claims procedure

From July 1, the cap on unpaid entitlements an employee can seek through the small claims process will lift from $20,000 to $100,000. The change comes as part of the federal government’s ‘Secure Jobs, Better Pay’ legislative package.

Discussing the measure before it passed into law, Minister for Employment and Workplace Relations Tony Burke said the $20,000 cap was too restrictive. “The current low threshold forces many workers to pursue pay claims through a full court process which can be expensive, time-consuming and complex,” he said.

16.   WA regional allowance increase

Employers with staff in certain regional WA locations must pay an extra weekly allowance under the state’s industrial relations system. Those rates will be adjusted on July 1.The new allowance rates will stretch from $9.00 per week for employees in Kalbarri up to $66.60 in Argyle.

How can we help?

If you have any questions or would like further information, please feel free to give our office on 08 9221 5522 or via email –  or arrange a time for a meeting so we can discuss your requirements in more detail.

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