Payroll and HR 1 July 2021 update

It’s nearly 1 July again! If you have employees, there are a few changes you need to be aware of. We’ve provided a summary below, however, please feel free to reach out to your usual contact at Addison Partners or call our HR Specialist, Debbie Innes on 02 4995 7300.

Increase in Superannuation Guarantee Contribution

The Superannuation Guarantee Contribution (SGC) has been at 9.5% of ordinary time earning since 2014 and is set to increase to 12% over the next few years as follows:

From 1 July 2021, SGC will increase to 10%.

The increase is designed to increase savings for retirement for all working Australians. Businesses will need take this increase into consideration when setting budgets for wages over the coming years.

We would recommend you check that your payroll software provider is increasing the rates for you for the first pay run after 1 July. You may need to make changes to your pay categories in your software depending on the way they have been set up. We can assist you with this process.

You can find more information on the increase to superannuation here.

Minimum Wage Increase

The Fairwork Commission has handed down the minimum wage increase of 2.5% to apply from 1 July 2021 with the award wage increase occurring in 3 different stages. Most awards will increase from 1 July.

The wages in the General Retail Industry Award are set to increase from 1 September 2021. A handful of awards will increase from 1 November 2021 including the Fitness, Hair & Beauty, Hospitality, Registered Cubs and Restaurant Award.

You can find more information here.

You can subscribe to the updates for your award by visiting Fairwork’s website here.

It’s important to get the pay rates for your employees correct. On top of the requirement to make back payments to your employees, you may also receive fines for failure to compensate your employees correctly.

It’s also a great time to review pay rates for any of your employees who are receiving a salary. The salary must compensate your employee for all entitlements they would receive if they were paid strictly by the award. This includes wages, overtime, loadings including leave loading, allowances and penalty rates.

Not sure you have the right award, pay rates, levels? We have a specialist HR team that can review your payroll to ensure you are paying your team correctly.

Single Touch Payroll

The government have announced they are expanding the Single Touch Payroll System (STP). STP allows employers to report information to the ATO when processing each pay run. Software like Xero and MYOB are enabled to do this mandatory reporting for you.

During phase 2 of STP, employers will be able to report other information to the ATO replacing the need to lodge Tax File Number Declarations along with allowing for more information to be reported to the ATO and other government agencies including the Child Support Agency.

From 1 July 2021, amounts paid to closely held payees will need to be reported through STP. You may apply for an exemption only in exemptional circumstances.

You can find out more about the changes to Single Touch Payroll here.

Need help with STP? Our accountants can assist you to set up your payroll software to ensure you are compliant with your reporting obligations.

Casual employees

The Fairwork Commission has recently made changes to the Fair Work Act relating to casual employees including providing a definition of casual employment

Specifically, under the Fair Work Act, a person is a casual employee if:

• they are offered a job
• the offer does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work
• they accept the offer knowing that there is no firm advance commitment

We would strongly recommend you have a written employment agreement in place for all your employees, but specifically for your casuals. The agreement should clearly state that your employee is a casual and that you have not made a “firm advance commitment that the work will continue indefinitely with an agreed pattern of work.”

As part of the changes, all employers are required to provide their casual employees with the Casual Employment Information Statement. This statement must be provided as soon as possible for employees with less than 15 employees. Larger employers have until 27 September 2021 to provide the statement to their casual employees.

You can view the Casual Employment Information Statement here.

The other change relates to the offering of permanent employment to regular ongoing casual employees. A casual employee can change to full-time or part-time employment at any time if the employer and employee both agree to it.

Under the National Employment Standards, casual employees have the right to access a pathway to become a permanent full-time or part-time employee, in some circumstances. This is also known as ‘casual conversion.’ Some awards also provide rules around casual conversion.

You can find more information on the changes to casual employment here.

Apprentices and trainees

Have you ever thought of taking on an apprentice or trainee? Now is the perfect time considering the wage subsidies and incentives on offer.

Boosting Apprenticeship Commencements wage subsidy supports employers to take on new apprentices and trainees.

Through the subsidy, employers that engage an Australian Apprentice/Registered Trainee between 5 October 2020 and 31 March 2022 may be eligible for a subsidy of 50 per cent of wages paid to a new or recommencing apprentice or trainee for a 12-month period from the date of commencement, to a maximum of $7,000 per quarter.

The subsidy is available to employers of any size, industry or geographic location.

This subsidy is on top of the existing commencement and completion subsidies. More information can be found here.

Given the complexity of our industrial relations system, we would suggest you book an appointment with our HR Specialist, Debbie Innes to discuss your specific circumstances. Debbie can also assist you with employment agreements, recruitment, performance management, award interpretation, payroll queries, apprentice sign up and termination advice.