If you own or operate a small business, you’re most likely interested in what the upcoming national minimum wage increase might mean for you. Read on for some helpful information.
What Changes Can We Expect?
Following a review by the Fair Work Commission, the federal government intends to raise the minimum wage by 5.2% and to implement an increase of 4.6% for award wage earners. These changes will occur in stages.
The current minimum wage for Australian workers is $20.33 per hour, which equates to $772.60 per 38-hour week before tax. Casual employees covered by this wage also receive a casual loading of at least 25%. An increase of 5.2% means the new minimum wage will sit at $21.38 per hour or $812.60 per 38-hour week.
When Will The Changes Happen?
We can expect the first increase on July 1, 2022. If your business pays employees on a weekly basis, the wage increase will apply to you in the first full pay period week on or after July 1.
What Are The Stages?
The wage increase rollout will be staggered by industry. While most businesses will begin paying the new wage from July 1, award rates in aviation, tourism or hospitality will not have to implement the change until October 1, 2022.
Are All My Employees Impacted?
You might find that your employees will be affected differently. Those employees currently on minimum wage or not covered by an award will receive the increase, but employees paid junior rates or working under registered agreements will have different entitlements, so you will need to check these carefully. Any employees already paid above the minimum wage will not be affected.
What Does The Wage Increase Mean For My Business?
The wage rise is compulsory and non-negotiable and is designed to help Australians manage the cost of living and cope with inflation.
It will see changes to employee entitlements, such as annual leave or allowances.
You will need to ensure employees receive the full minimum wage and that this is reflected in your payroll or accounting software.
Small businesses are under more stress than ever, and as a modest increase, you might be feeling the pressure, but it is unlikely to put undue strain on your business.
What About Single Touch Payroll?
With the continuation of Single Touch Payroll (STP), it’s important to be sure you’re paying employees correctly. This is a key point of information for the ATO, who will use the STP to monitor payments, data and records. It’s crucial to ensure you pay your employees correctly, on time, and at or above the minimum wage.
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It’s so important to keep your business finances under control, and at Early Bird Accounts Tamworth, we pride ourselves on reliable, professional and efficient bookkeeping and accounting services. We handle all areas of the bookkeeping process so that you don’t have to! Contact us today at (02) 5701 5562 to speak to our team or to book an appointment.