Important Changes from 1 July 2022 for Business Owners

Australian business owners need to be aware of a number of changes effective 1 July 2022. It's important to keep your clients across these changes so they remain compliant.

Minimum Wage Increase

The Fair Work Ombudsman is reminding employers that the national minimum wage increased to $21.38 per hour (up from $20.33) or $812.60 per week (up $40 from $772.60) based on a 38-hour week for a full-time employee. This increase applies from an employee’s first full pay period starting on or after 1 July.

Casual employees entitled to the national minimum wage must receive a minimum $26.73 per hour, which includes their 25 per cent casual loading.

The increases to award wages will happen in two stages, with most award wages increasing from 1 July 2022. For 10 awards in the aviation, hospitality and tourism industries, the increase will start from 1 October 2022. A list of these awards can be found at 1 October 2022 minimum wage increase.

You can obtain details about this increase HERE.

Superannuation guarantee rate increase

The amount of superannuation employers need to pay their employees changes from 1 July 2022.

The SG rate will increase from 10% to 10.5% on July 1, 2022, and is legislated to increase further to 12% by 2025.

The Australian Taxation Office (ATO) is reminding employers that they will need to use the new rate to calculate super payments on or after July 1, even if some or all of the pay period covers work that was done before July 1.

Superannuation monthly threshold removed

From July 1, 2022, the $450 monthly eligibility threshold for SG payments will be removed, which means employees can be eligible for superannuation payments regardless of how much they earn.

If you are an employer, this means that as of 1 July 2022, you will be obligated to pay all employees (except for employees under 18 years old with less than 30 hours per week), superannuation contributions of 10.5%, regardless of whether they earn more than $450 per month or not.

This change has been brought about in a bid to improve equality in the superannuation system, as the majority of workers who earn less than this monthly amount are women.

Single Touch Payroll (Phase 2)

The expansion of STP, also known as STP Phase 2, will reduce reporting burden for employers who need to report information about their employees to multiple government agencies. It will also help Services Australia’s customers, who may be your employees, get the right payment at the right time.

The mandatory start date for Phase 2 reporting was 1 January 2022 however many of the software providers were not ready and there was a blanket extension for many small business owners.

As most software providers are now ready or close to ready, it’s recommended that if you have not yet moved to STP2, you do have a chat with your Bookkeeper and start the transition.

Benefits of STP Phase 2

For Employers:

The ATO will use the STP Phase 2 information to streamline employer interactions. For example:

• You’ll no longer have to send the ATO your employees’ tax file number (TFN) declarations. Your employees will provide it to you, and you’ll need to keep it with your employee records.
• If you’re using a concessional reporting option, such as for closely held payees or for inbound assignees, you’ll be able to tell the ATO through reporting income types.
• If you make a Lump sum E lump sum Epayment, you won’t need to provide Lump sum E letters to your employees. You’ll have included the amount and the period it relates to.
• If you change software or your employee’s payroll ID, you can tell the ATO  in your STP report if your solution has this functionality. This will help fix issues with duplicate income statements for employees in ATO online services through myGov.

The ATO will also share payroll information you report in near real-time with Services Australia. They’ll use it to streamline requests:

• for you to provide or confirm employment and payroll information about your employees
• from your employees to provide employment and payroll information such as pay slips for prior periods.

You may no longer need to provide separation certificates when your employees leave. The date and reason an employee leaves will be in your STP report.

You can also voluntarily report child support deductions or garnishees (or both) through STP. This reduces the need to send separate remittance advices to the Child Support Registrar.

STP Key changes

Most of the additional information you need to report should already be captured in your current payroll software.

The key changes to the STP report include:

• Disaggregation of gross
• Employment and taxation conditions
• Income types
• Country codes
• Child support garnishees and child support deductions
• Reporting previous Business Management Software IDs and Payroll IDs

STP2 Employer guide

The STP Phase 2 employer reporting guidelines help outline what is required for reporting through your STP Phase 2-enabled software.

Find out more about mandatory reporting.