For the coming year, there are annual payroll changes (ones which are adjusted each year) and some new rules which may affect your interactions with employees.<\/p>\n
Annual Payroll Changes \u2013 Superannuation and Wage Rates<\/strong><\/span><\/p>\n Superannuation Contribution Guarantee (SCG) will rise from 11% to 11.5% from 1 July 2024.\u00a0 It is important to know that the increased Superannuation is calculated on date wages are paid, <\/strong>irrespective of when the pay was earned.<\/strong> For example, if pay period crosses the June-July period, do not split the calculations based on the dates worked. If the payment is processed to the employee bank account on or after 1 July, then the higher amount (11.5%) is used. To minimize cost to the business, make sure all backpay and penalty claims are paid by 30th<\/sup> June.<\/p>\n Award increases are set from 1st<\/sup> July each year. The new higher rates only apply to the first full pay period after 1 July. <\/strong>For example, all hours in a fortnightly pay period from 23rd<\/sup> June \u2013 6th<\/sup> July would be paid at the old rate and the period 7th<\/sup> July \u2013 20th<\/sup> July would be paid at the new, higher rate.<\/p>\n The transition period is confusing. Here is an example:<\/p>\n Employees\u2019 Hourly Rate<\/strong>:<\/span> Use the old rate for all hours paid because only part of this pay run is for the new year.<\/p>\n Superannuation<\/strong>:<\/span> Use new rate of 11.5% because the payment date is after 30 June.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Payroll software which is set up correctly will automatically adjust the superannuation calculation. If your payroll software is linked to an Award, the wage increase will also happen automatically. But if you are changing wages manually, make sure you do not change rates until just before the first full<\/strong> pay period of the new financial year.<\/p>\n If you have a bookkeeper or payroll officer, they will check all this for you.<\/p>\n SCG annual limit increases from $27,500 to $30,000 for the 2024-25 year. Employees who are trying to salary sacrifice to the upper limit, may request to increase their salary sacrifice amounts.<\/p>\n New Rules<\/strong><\/span><\/p>\n A new Government and the introduction of the \u201cClosing Loopholes\u201d Legislation has supercharged changes to employment conditions. These are wide-ranging but this article will focus on elements more likely to affect a standard dental practice.<\/p>\n Full details of all changes can be found on the Fair Work Commission website.<\/p>\n From 24 August 2024 for businesses with more than 15 employees and 24 August 2025 for all businesses, employees can refuse to engage with the employer outside paid work hours.<\/p>\n Employers are not prohibited<\/strong> from contacting employees but the employee can refuse to monitor, read or respond to contact outside working hours. There is no problem in sending communication but do not expect any response outside working hours.<\/p>\n To minimize frustration and misunderstanding, have a simple \u201ccontact\u201d policy in writing and in future employment contracts so that everyone involved is clear about the expectations. Just remember that an employer cannot insist on employees being available outside paid work hours. If your practice sometimes has to ask employees to fill in for some shifts or to cover other employees on unexpected leave, it is important that you have an agreed communication method for these circumstances.<\/p>\n The definition of casual employee has changed slightly.\u00a0 The new definition says that an employee is a casual only if:<\/p>\n When a casual employee commences work, they must be given a \u201cCasual Employee Information Statement\u201d (available on the Fair Work website). If you have more than 15 employees in the business, you will have to offer conversion to permanent work if certain conditions are met. The employee does not have to accept that offer and can choose to remain casual, with the 25% wage loading to which casuals are entitled. You should keep a record of the offer and refusal\/acceptance in writing.<\/p>\n For the employee, a move from casual to permanent would give them access to personal and annual leave plus payment for public holidays. Casuals are already eligible for long service leave, so that would not change. On the flip side, their wage will decrease.<\/p>\n From 1 January 2025, employers who are proven to intentionally underpay wages and superannuation, can be fined or imprisoned for up to 10 years.\u00a0 The important proviso is \u201cintentionally\u201d. <\/strong>\u00a0Errors made inadvertently will not be caught by this new law.<\/p>\n A \u201cVoluntary Small Business Wage Compliance Code\u201d will be introduced and available to small business employers (those with less than 15 employees).<\/p>\n In summary, the other changes less likely to be relevant to most dental practices are:<\/p>\n Changes in the Pipeline<\/strong><\/span><\/p>\n 1 July 2025, SCG<\/strong> will increase to 12%. This is the last of the legislated superannuation increases at this stage.<\/p>\n 1 July 2026 \u2013 Payday superannuation<\/strong> – perhaps the biggest change to payroll processing will be the requirement to pay employee superannuation at the same time as their salary and wages. This is not yet law. While the dates may change, it is already on the ATO planning timeline. Superannuation funds and payroll software will make changes to enable the change to be implemented.<\/p>\n A warning on Superannuation payments<\/strong><\/span><\/p>\n The ATO is now matching superannuation payments with payroll notifications and contacting employers who are late paying employee superannuation \u2013 that is, later than 28th<\/sup> after the end of the quarter.<\/p>\n For some employers, the definition of \u201clate\u201d will be a surprise.<\/p>\n \u201cLate\u201d is not based on the date the payment leaves the employer bank account, but rather when it is received by the employee\u2019s superfund.<\/p>\n These days, superannuation is normally paid via a clearing house and it commonly takes 5-7 working days between sending the payment to the clearing house and the arrival of the money to the employee\u2019s superannuation fund. Notwithstanding this timeframe is out of the control of the employer, any \u201clate\u201d payment is deemed to be the fault of the employer.<\/p>\n Once a superannuation payment is late, it is subject to fines and becomes non-deductible.<\/p>\n The ATO has very little discretion to waive these rules even in exceptional circumstances. Rather than being the prophet of doom, I hope this warning will allow employers to be forewarned and so forearmed.<\/p>\n\n\n
\n A pay period runs from Sunday 23rd<\/sup> June to Saturday 6th<\/sup> July and will be paid on Monday 8th<\/sup> July.<\/p>\n \n
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