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Top Tax Tips – 7 December

Act before 31 December 2016 to qualify for a 5% bonus on HELP payments

Currently, individuals can qualify for a 5% bonus if, before 31 December 2016, they make a voluntary higher education loan program (HELP) repayment:

  • of $500 or more (provided the HELP balance is $500 or more); or
  • to repay the debt in full (provided the HELP balance is less than $500)

Please note that from 1 January 2017 the voluntary repayment bonus scheme will no longer apply – this is a valuable once-off concession.

Please contact us to advise of your dependants’ or your HELP debt  and how to benefit from the 5% discount.

Issues to think about when hiring people over the Christmas season

In last week’s Top Tax Tips we stressed the importance of being able to distinguish whether a worker is an employee or contractor because the status of the worker determines various tax, superannuation and other obligations.

Such a distinction is especially important over the festive season where a business may be busier than usual (e.g. especially retail) and especially where workers are hired on a casual or temporary basis.

Because of the severity of the penalties for incorrectly classifying a worker’s status (i.e. whether the worker is an employee or contractor), please contact us so that we can assist with the correct classification of workers hired over this festive season and advise you on PAYG(W), superannuation guarantee, payroll tax and workers compensation obligations.

Backpacker tax finally set at 15% from 1 January 2017

From 1 January 2017, the Government will tax working holiday visa holders / backpackers at a flat rate of 15% on earnings up to $37,000 with ordinary marginal rates of tax applying after $37,000.  Furthermore, if a backpacker leaves Australia after the working holiday, any superannuation contributions made on behalf of the backpacker will be taxed at 65% (giving rise to an effective tax rate of 70.25%  – because contributions into the fund is first taxed at 15%)

With the new system that applies from the New Year, our understanding is that businesses intending to employ backpackers will have to register with the ATO (to ensure a 15% withholding rate) – if such businesses fail to register by the due date, such businesses will be liable to an administrative penalty.

Keep reading Top Tax Tips for more information on the Backpacker tax or contact your Nexia Edwards Marshall representative.

How can Nexia Edwards Marshall NT help you?

For any questions or to discuss any of the above in relation to your personal situation, please contact Sarah McEachern or your Nexia Edwards Marshall NT Advisor.

The material contained in this publication is for general information purposes only and does not constitute professional advice or recommendation from Nexia Edwards Marshall. Regarding any situation or circumstance, specific professional advice should be sought on any particular matter by contacting your Nexia Edwards Marshall advisor.

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