The financial year ends in Australia this weekend. To give you a hand we’ve added a couple of pages to our Help Centre:
There’s also a year-end checklist that Xero Partners can download from the Resources section of Partner Edition.
A lot of things change at this time often including the struggle to upgrade your software – and pay for it in more ways than one. Being in the cloud, Xero changes this. Here are some updates we’ve made in Xero to help you through.
For those of you using Payroll in Xero, the following changes automatically apply to any pay runs with a payment date from 1 July 2012:
Leave Loading: The Leave Loading tax scales have been removed by the ATO from 1 July 2012. From 1 July any employee that used to have a specific leave loading tax scale will see less tax being withheld from their pay for time at work.
Removal of Flood Levy: Flood Levy is no longer applied to pay runs from 1 July 2012 so won’t be deducted from any employee that this was applied to.
New tax thresholds: The tax free threshold rises from $6,200 to $18,200 along with other scale changes too. Some employees will take home more pay, but as this is part of the Carbon Tax Initiative the extra income will likely be offset by an increase to other costs such as utility bills.
Superannuation on pay slips: The government’s plan to make employers show the expected payment date of employee superannuation on payslips from July 2012 has been deferred. Users have also asked for this feature so we’ve made it available for you now. Payroll in Xero removes the hassle of paying superannuation to the funds each quarter altogether by doing it for you. Check out our automated superannuation payment service that’s included in the Large subscription.
Reporting and depreciation
Taxable Payments Annual Reporting: Check out our previous post for more information, but if you’re in the building and construction industry you’ll be able to use Xero to create the new ATO Taxable Payments Annual Report in July 2013.
Instant asset write off: Small businesses (turnover less than $2m) have had an increase to the threshold for immediate depreciation deduction on assets of up to $6,500 (this was increased from the initially announced $5,000 to accommodate the Carbon Tax). There’s also some changes to the instant write off and depreciation on vehicles costing more than $6,500. It can all get pretty complex so have a chat to your accountant if you’d like to know more about what’s best for you.
Superannuation Guarantee Contribution (SGC) rate increase: From 1 July 2013, there’ll be incremental increases each year to the minimum amounts of superannuation you contribute to your employees, reaching 12% in 2019/2020. The first SGC increase is from 9% to 9.25% on 1 July 2013. We’ll keep you well informed closer to the time.
Loss Carry Back Scheme: The planned cut to the company tax rate is no longer going ahead from 2013/2014. However it is planned that from 2013/2014 businesses will be able to carry back losses to offset previous profits and get a refund on tax previously paid.
We recommend you talk to your accountant about these changes. If you’re looking for an accountant or bookkeeper check out our advisors directory.
So there you have it – not an exhaustive list but some key things to be aware of. Let us know how your year-end goes.
See you in FY13!