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| Individual Resident Income Tax Rates |
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| Tax rates 2010-11 |
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| Taxable income |
Tax on this income |
| $0 – $6,000 |
Nil |
| $6,001 – $37,000 |
15c for each $1 over $6,000 |
| $37,001 – $80,000 |
$4,650 plus 30c for each $1 over $37,000 |
| $80,001 – $180,000 |
$17,550 plus 37c for each $1 over $80,000 |
| $180,001 and over |
$54,550 plus 45c for each $1 over $180,000 |
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| Tax rates 2009-10 |
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| Taxable income |
Tax on this income |
| $0 – $6,000 |
Nil |
| $6,001 – $35,000 |
15c for each $1 over $6,000 |
| $35,001 – $80,000 |
$4,350 plus 30c for each $1 over $35,000 |
| $80,001 – $180,000 |
$17,850 plus 38c for each $1 over $80,000 |
| $180,001 and over |
$55,850 plus 45c for each $1 over $180,000 |
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| Tax rates 2008-09 |
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| Taxable income |
Tax on this income |
| $0 – $6,000 |
Nil |
| $6,001 – $34,000 |
15c for each $1 over $6,000 |
| $34,001 – $80,000 |
$4,200 plus 30c for each $1 over $34,000 |
| $80,001 – $180,000 |
$18,000 plus 40c for each $1 over $80,000 |
| $180,001 and over |
$58,000 plus 45c for each $1 over $180,000 |
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| The above rates do not include the Medicare Levy of 1.5% |
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| For individual income tax rates for years prior to 2008/2009 please click here |
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| Do you have a business or are you considering going into business? |
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| Why you need to visit us?
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| Whether you are already running a business or are considering going into business, having the right business support network is critical to any businesses success. By having the right business advisors and getting the right advice you will not only ensure you are making the correct decisions for your business today but you will also have the peace at mind that you are taking the adequate steps to protect your business and wealth for any unforeseen circumstances in the future. At Kallinicos and Associates we take a proactive approach to business rather than a reactive one. We endeavor to work in with our clients and advise them on their businesses and situations as they make their decisions along the way not when it’s too late in the future. Below is a brief summary of many of the complex considerations that anyone in business should be aware of. If you are looking for the right business partner or simply need guidance on a personal or business situation don’t hesitate to give us a call. |
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| Small businesses
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What is a small business?
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A small business is a business (or group of businesses) with a turnover of less than $2 million. The government provide a range of tax concessions for small businesses. We have provided a general list below of some of the more common Income Tax and GST concessions however it is imperative that you seek advice if you are looking to access these concessions as many of them have complex conditions that must be met, especially in the CGT area. |
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General Small Business Concessions
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GST on cash basis
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As a small business you have the option to register for GST on a cash basis rather than an accruals basis. This means you only have to pay GST on sales that have been received not on your debtors. This can often provide much needed cash flow relief for many businesses who carry a large amount of debtors. |
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Depreciation and asset tax concessions |
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Under the small business concessions you can immediately write off any depreciable assets with a value of less than $1000. Any depreciable assets over $1000 can generally be pooled with a depreciation rate of 30%. Businesses outside the small business regime must depreciate all assets over $100 therefore you can see how attractive this concession is. |
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Prepayment concessions |
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You can claim an immediate deduction for prepaid expenses where the payment covers a period of 12 months or less that ends in the next income year. |
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Entrepreneurs Tax Offset |
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You may be able to reduce the tax payable on your business income by up to 25% where your business has an aggregated turnover less than $75,000 with the entrepreneurs tax offset. |
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Small business entity CGT concessions
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15 year asset exemption
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If you are aged 55 or older and retiring or are permanently incapacitated, and your small business has owned an asset for at least 15 years, you won’t have to pay CGT when you sell the asset. |
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50% active asset reduction |
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If your small business or small business asset satisfies the definition of an active asset then you will only pay tax on 50% of the capital gain when you sell that asset. |
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Retirement exemption |
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If you have a capital gain on the sale of a small business or small business asset you may choose to apply the retirement exemption up to a lifetime limit of $500,000. If you are under 55 you must physically pay this money to a complying superannuation fund. |
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Small business rollover |
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If you sell a small business or small business asset and buy a replacement one you can defer any capital gain until a later time. |
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| Registrations
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GST
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You must register for GST if you have a turnover of over $75,000 from a business or profit making activity. GST is declared and paid through your business activity statement and there are different methods and due dates depending on your particular circumstances. |
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PAYG |
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If you pay wages or make any payments of which tax must be withheld you must register for PAYG and report and pay that PAYG in the appropriate way. |
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Fuel Tax Credits |
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Certain businesses and activities are eligible for a rebate on fuel known as Fuel tax Credits. Motor vehicles are generally not eligible for the rebate however if your business currently uses fuel in other areas and you are not claiming fuel tax credits you should seek advice as to whether or not you are eligible. |
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WET and Excise |
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The government imposes certain other taxes on particular goods such as Wine Equalization Tax (WET) and Excise. These are very much only applicable to certain types of businesses and goods. |
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| Industry
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Budgeting & Benchmarking
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As a business you will always be in competition with your industry peers, constantly trying to become more efficient and cost effective to reach certain targets and goals that you have set for yourself. This is where budgeting and business benchmarking play such an important role. Budgets and key performance indicators (KPI’s) are crucial to align your particular strategies and processes of your business to your goals. They should be done regularly and adjusted where needed. If particular weaknesses are identified then they can be addressed immediately. |
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Business benchmarking also assists in this role by comparing your business to the industry average. Knowing if you are trading below or above the industry average will assist you in knowing how you fair compared to your competitors and may also be crucial in identifying where you should focus your efforts. |
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Industry specific Tax and GST concessions |
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There are many industry specific Tax and GST concessions such as the margin scheme for residential building developers, special GST rate for businesses operating caravan parks, income averaging for artists just to name a few. This is very much an area that needs to be addressed on a case by case basis. |
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| Record Keeping
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Bookkeeping
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Having accurate books are crucial to a businesses success. Having access to accurate, timely information about your business is just about as important as anything when it comes to your business. For without information about your business you can not make reliable decisions about your business. |
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Your bookkeeping needs will very much depend on the scale of your enterprise. A small business may be able to avoid having to pay for bookkeeping services by doing it themselves or through personally tailored options through our practice. However as your business grows it is only natural that your time will be better spent elsewhere running the business and you will need to move to more powerful bookkeeping programs such as MYOB or Quickbooks which often require the services of a bookkeeper. |
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| Asset Protection and Structuring
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| Structuring your business correctly is a crucial element to mitigating business risk and protecting your personal wealth that you have spent years accumulating. Not only does the right structure provide protection for your assets but it can also be a very useful tool to minimize taxes. Don’t pay more than you have to. Time and time again we see people not structured appropriately and sadly they are missing out on thousands of dollars in potential tax savings. If you are not sure or would like advice speak to one of our specialists. |
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| Taxes
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State taxes
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Payroll Tax |
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Payroll tax is a state based tax. In Queensland if you have taxable wages over $1 million then you must register for payroll tax. This tax is assessed and paid monthly. |
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Land Tax |
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Depending on whether you own land or property in your individual name or a trust or company different rates of land tax will apply. Land tax in Queensland is a yearly tax and is taxed at marginal rates depending on the taxable value of the land. The taxable value is determined by the Department of Environment and Resource Management. |
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Transfer Duty |
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Transfer duty in Queensland is payable when you make dutiable transactions (i.e. buy certain business assets or property). It is taxed at marginal rates set out by the office of state revenue. It was previously known as stamp duty. |
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Income tax
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Income tax is a tax on any profits or income earned by people in Australia and is the government’s main source of revenue. Companies currently get taxed at a flat 30% tax rate whilst individuals get taxed at marginal rates as shown at the top of this page. There are various ways income tax can be minimised such as through effective structuring, claiming tax deductions and claiming various rebates the government offer. Income Tax is declared and paid through an income tax return. |
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GST
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Goods and Services Tax (GST) is a sales based tax and is only payable by businesses or people in Australia who conduct an enterprise. It is compulsory for businesses with a turnover over $75,000. The current GST rate is 10%. There are many rules and considerations that must be addressed therefore advice is critical to ensure compliance. GST is declared and paid through your Business Activity Statement (BAS). |
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FBT
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Fringe Benefits Tax (FBT) is a tax on businesses who provide benefits to employees such as motor vehicles, entertainment, living away form home allowances etc. It is currently set at a rate of 46.5% and is a very complex area that all employers must be aware of. FBT is declared and paid through an FBT return and the FBT year runs from 1 April to 31 March. |
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Superannuation
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Superannuation is a charge levied upon employers for the retirement and benefit of their employees. It is set at a rate of 9% of wages and is paid in addition to an employees wage. It is a compulsory charge and very heavily monitored. It is due quarterly and payable by the 28th day from the end of quarter. |
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| Fair Work Act and National Employment Standards |
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| Up until 31 December 2009 employment conditions were regulated by the federal government for companies and all other entities were regulated by the state. From 1 January 2010 the federal government have enacted the Fair Work Act 2009 and most states (including Queensland) have passed on their powers to the commonwealth meaning that we now are effectively regulated by one government department which is Fair Work Australia. They will be in charge of enforcing all minimum standards and resolving any workplace disputes regarding unfair dismissal, termination of employment etc. It is very important that employers understand their obligations and employees understand what they are entitled to. |
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| The essence of the fair work act was the introduction of the National Employment Standards (NES). These are the bare minimum conditions that all employees will be entitled to. In summary they are as follows: |
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Maximum weekly hours of work – 38 hours per week, plus reasonable additional hours. |
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Requests for flexible working arrangements – allows parents or carers of a child under school age or of a child under 18 with a disability, to request a change in working arrangements to assist with the child’s care. |
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Parental leave and related entitlements – up to 12 months unpaid leave for every employee, plus a right to request an additional 12 months unpaid leave, plus other forms of maternity, paternity and adoption related leave. |
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Annual leave – 4 weeks paid leave per year, plus an additional week for certain shift workers. |
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Personal / carer’s leave and compassionate leave – 10 days paid personal / carer’s leave, two days unpaid carer’s leave as required, and two days compassionate leave (unpaid for casuals) as required. |
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Community service leave – unpaid leave for voluntary emergency activities and leave for jury service, with an entitlement to be paid for up to 10 days for jury service. |
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Long service leave – a transitional entitlement for certain employees who had certain LSL entitlements before 1/1/10 pending the development of a uniform national long service leave standard. |
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Public holidays – a paid day off on a public holiday, except where reasonably requested to work. |
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Notice of termination and redundancy pay – up to 4 weeks notice of termination (5 weeks if the employee is over 45 and has at least 2 years of continuous service) and up to 16 weeks redundancy pay, both based on length of service. |
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Provision of a Fair Work Information Statement – employers must provide this statement to all new employees. It contains information about the NES, modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, rights of entry, transfer of business, and the respective roles of Fair Work Australia and the Fair Work Ombudsman. |
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| In addition to the NES, new award wages were introduced. These awards are called ‘modern awards’ and work in conjunction with the NES. They stipulate the minimum pay and conditions of employment for various occupations and can be found at the fair work website www.fairwork.gov.au. |
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| If you have any questions regarding the new workplace rules please call us or alternatively you can call fair work Australia on 13 13 94. |
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| Contractors & Superannuation Guarantee Obligations |
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| Important:
There has been considerable confusion and dispute in recent years as to whether superannuation must be paid by employers for people who work for them as contractors. The general rule is that superannuation only needs to be paid to employees who earn salary and wages. |
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| However the definition of employee is then further expanded to include certain contractors who are in almost every way acting as an employee and whose contracts are wholly or principally for labour. The tests for when a contractor will constitute an employee for superannuation guarantee purposes can basically be summarised as follows: |
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Has the contractor contracted with the employer to produce a result or have they simply contracted to provide the employer with their labour to achieve the result? |
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What level of control and authority does the employer have over the contractor? |
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Does the contractor work predominantly for this one employer or do they perform (and are available to perform) work for other parties? |
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Does the contractor charge on an hourly basis or do they charge for a completed job (or job in stages)? |
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Can the contractor sub-contract the work that they have contracted to perform or must they perform that work themselves? |
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Would the contractor be personally liable for any defects in the work? Does the contractor bear the commercial risk and responsibility for any poor workmanship? |
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Does the contractor provide their own tools or equipment to perform the services required? |
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The fact that the contractor has an ABN and invoices the employer does not mean they are not an employee for superannuation purposes! |
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Contracts with a company, trust or partnership will not be considered to constitute an employee-employer relationship even if the above is satisfied. |
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| If you are unsure as to whether or not you have superannuation obligations to contractors you engage then please phone our offices immediately for advice. Alternatively there is an ‘employee/contractor decision tool’ provided by the ATO where you can answer a series of questions and it will provide an answer. This can be accessed through the ATO website. |
