Each year brings a new set of rules and regulations pertaining to taxes that weren't around previously. As a business owner — or just as a tax-paying citizen of Australia, for that matter — it's important to be aware of these changes so you can take the appropriate adjustments and precautions in 2022 and beyond.
Here are some of the tax law adjustments to be mindful of as you go about your management and hiring activities this year.
1. Payroll tax surcharge for mental health needs
Depending on the number of people employed, payroll levels and where they operate is located, business owners must pay a mental health levy. As noted by the State Revenue Office of Victoria, the 0.5% surcharge is applicable to business owners whose payrolls are in excess of $10 million per year, assuming they operate within Victorian borders. This payroll tax surcharge went into effect 1 January.
However, some business owners may need to pay a 1% surcharge. This higher rate applies to those entities whose payrolls exceed $100 million; 0.5% is for those between $10 million and $100 million.
Mental health is an issue that more employers are prioritising in terms of helping their teams deal with any challenges and to not hesitate to talk about it with human resources or their supervisors. According to the Victorian Department of Health, 45% of adults in Australia either have a mental illness currently or will at some point in their lives.
The proceeds of the payroll tax surcharge will support treatment needs for hospitals and mental health clinics.
2. Land tax threshold raised
Before 2022, the general land tax threshold in Victoria was $250,000. Moving forward, it's increasing to $300,000. This means that you will not have to pay the land tax if your property is below this new higher threshold.
3. Changes for construction firms
Other newly effective laws that may be relevant to you include the Regional Comprehensive Economic Partnership Agreement and the Building Equality Policy, which requires construction firms to devote more resources to hiring women. Fees may apply to those who do not comply.
At WMC Accounting, we provide a wide range of individual and business services that go beyond traditional accounting. These include budgeting, risk management and strategic planning. If you need assistance with any of these rule changes, we'd be more than happy to help. Contact us today.