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Federal Budget 2020-21
Key Notes and Tax Changes
PYL Accountants have summarised Federal Budget 2020-2021 announced by the Australian Federal Government for your reference. The proposed changes do not take effect until it has been legislated by the senate and this is not a full version of Federal Budget 2020-21. For more details please enquire us or refer to ATO full version.
Individual Tax Cut (in effect as law)
The 2021 Federal Budget aims to lower individual income tax and increase individuals’ disposable income. From 15 October 2020, PAYG tax tables are updated to reflect the tax cut for individuals.
Resident Tax Rate Change
Tax Rate in 2020-21
(Including from Medicare Levy)
|Tax Thresholds in 2020-21|
|Nil||$0 - $18,200|
|21%||$18,201 - $45,000|
|34.5%||$45,001 - $120,000|
|39%||$120,001 - $180,000|
|Low income tax offset||Up to $700|
|Low and middle income tax offset||Up to $1,080 per individual|
Foreign Resident Tax Rate Change
Tax Rate in 2020-21
(Exempt from Medicare Levy)
|Tax Thresholds in 2020-21|
|32.5%||$0 - $120,000|
|37%||$120,001 - $180,000|
Business Tax Concessions (in effect as law)
The 2021 Federal Budget have list out a number of business tax concessions for small business entity such as lower company tax rates, temporary full expensing deduction, instant assets write-off and temporary loss carry back. To work out if you are eligible for small business entity concessions, you first need to work out if you are a ‘small business entity’ in an income year. Get in touch with PYL Accountants today to find out whether your business is eligible for any tax concessions.
The government has announced a new incentive for businesses to employ additional young job seeker. Eligible employers will have access to Jobmaker Hiring Credit from $100 to $200 for each new job they create over the 12 months from 7 October 2020. Eligible employers will require to register with ATO and make claims quarterly, with claims commencing in February 2021.
JobKeeper Payments Update on 2 September 2020
Jobkeeper payment has extended to eligible businesses, sole trader and not-for profits until 28 March 2021.
28/09/2020 ～ 03/01/2021
Entity must have the 30% reduction in turnover for July-September 2020 compared with July-September 2019. If employees and the business participant work 80 hours or more per 4weeks, they are eligible to receive $1200/fortnight; otherwise, $750/fortnight.
04/01/2021 ～ 28/03/2021
Entity must have the 30% reduction in turnover for October-December 2020 compared with October-December 2019. If employees and the business participant work 80 hours or more per 4 weeks, they are eligible to receive $1000/fortnight; otherwise, $650/fortnight.
If the business meets the turnover test for the September 2020 quarter, then you will be able to access JobKeeper Stage 2, even if you did not qualify for JobKeeper stage 1.
Businesses will generally be able to assess eligibility based on details reported in their Business Activity Statement (BAS).
Employee Eligibility FAQ
Fulfill below all criteria as at 1 July 2020
permanent employees (full time, part time, long term
long term casual employee with at least 12-month services
aged 18-year-old or over
permanent residents or hold 444 Visa as at 1 March 2020
not receiving Parental Leave, Dad and Partner pay and Workers Compensation
not receiving JobKeeper Payment from another employer
Covid-19: Federal tax support measures announced 30th March 2020 - JobKeeper Payment
The Government is introducing a wage subsidy program to support employees and businesses. The JobKeeper Payment is designed to help businesses affected by the Coronavirus to cover the costs of their employees’ wages, so that more employees can retain their job and continue to earn an income.
Eligibility for Jobkeeper Payments
- Business impacted by the Coronavirus will be able to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020, for a maximum period of 6 months.
- Eligible Employers:
- Carried on a business on 1 March 2020
- Not-for-profit organisation and sole traders are also eligible
- Business Turnover has dropped:
- 30% fall in turnover (for an aggregated turnover of $1 billion or less)
- 50% fall in turnover (for an aggregated turnover of more than $1 billion)
- 15% fall in turnover (for ACNC-registered charities other than universities and schools).
- Eligible Employees:
- Currently employed by the eligible employer (including those stood down or re-hired);
- Employed by employer at 1 March 2020
- On 1 March 2020 were 18 years of age or older (if they were 16 or 17 they can also qualify for fortnights before 11 May 2020, and continue to qualify after that if they are independent or not undertaking full time study)
- Not receipt of a JobKeeper Payment from another employer
- Australian citizen, PR holder, Protected Special Category Visa Holder, a non-protected Special Category Visa holder resides in Australia for more than 10 years, or Subclass 444 Visa holder
- Were not in receipt of any of these payments during the JobKeeper fortnight:
- government parental leave or Dad and partner pay
- a payment in accordance with Australian worker compensation law for an individual’s total incapacity for work
Please note the Commissioner has extended the time to enrol for the initial JobKeeper periods from 30 April 2020 until 31 May 2020. PYL Accountants provides free assessment and consultation on whether your business is eligible to register for Jobkeeper payment.
Covid-19 Federal Tax Stimulus Package announcement 22nd March 2020
The Australian Federal Government has announced on 22nd March 2020 the second phase of stimulus package to help business during this critical time for coronavirus pandemic.
Key points for the stimulus package
We are here to supports everyone during this challenging phase. If you have any enquiries in regarding to the government stimulus package, please don’t hesitate to contact PYL Accountants.
- PAYG withholding tax relieve – employer for business, not for profits and charities that employs workers will be entitled to tax free cash supports from $20k to $100k
- Employer that hires apprentice or trainee are entitled for 50% wages subsidy of each apprentice’s or trainee’s wages of up to a maximum $21k
- Opportunity to request payment deferrals, low interest payment plans and possible remittance of interest and penalties
- PAYG Instalments can vary from March 2020 to June 2020 and opportunity to get September and December 2019 quarters instalments payment reimbursed
- Quarterly BAS Reporting Cycle can elect to change to monthly cycle to get quicker access to GST refunds
- Instant assets write off threshold to increased from $30k to $150k
- Accelerated depreciation of fixed assets of up to 50% on the cost of eligible assets on installation
- Ability to access up to $20k from superannuation fund
- Increase of minimum threshold for creditors issuing a statutory demand under Corporation law from $2,000 to $20,000
- Government loan subsidy for SMEs with 50% government guarantee will be provided to new unsecured loan to fund business working capital
- Government is providing two lots of $750 cash supports for certain people currently receiving welfare payments