Small Business Information.

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  • September 23, 2016

Tax Cuts – without holding amounts
Recently the Australian Government has increased the 32.5% tax threshold from $37,001 – $80,000 to $37,001 – $87,000. What does this mean for you?

Employers?
The tax tables have changed for employees who earn over $80,000.
You need to download the updated tax tables from ato.gov.au/taxtables or contact your payroll software provider for the relevant update.

Employee adjustments?
The new tax tables are effective from 1 October 2016. You don’t need to make any other adjustments or refunds as we will refund any over-payment of tax when your employees (and payees) lodge their 2016-17 income tax return.

Save $1000 on tax
If you are a small business, you can get a 5% tax discount on your tax (called an offset), up to $1,000 this tax time.
Your ‘offset’ is based on the amounts you report in your tax return. These are your:
– sole trader net small business income (business income after deductions)
– share of partnership or trust net small business income.

Things to do when completing your tax return:
1. Only include eligible business income for the offset. The following income is not eligible:
• personal services income (unless it’s from a personal services business)
• salary and wages
• director’s fees
• government payments
• interest and dividends (unless it’s related to a business activity).

2. Report your business income in two places so we can work out your offset:
• at Business/sole trader, partnership and trust income (including loss details) – to count towards your taxable income
• at Small business income tax offset (under ‘Offsets’).
If you are using a registered tax practitioner to lodge your tax return this year, you may want to discuss your eligibility for the offset with your tax practitioner.

Still Paying Super by cheque or direct deposit?
If you are still using cheques or direct deposit to pay your super, then by 28 October 2016, you need make a switch and start paying and reporting super electronically using the new SuperStream format.

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