GEARING UP FOR 1 JULY | What you Need to Know!

With the dawn of the new financial year comes a host of changes that small biz owners and employers need to be on top of. Ignorance is not bliss on this one! Starting from 1 July, brace yourselves for:

⚡Superannuation Guarantee (SG) Increase⚡

The SG rate is bumping up to 12%. Super guarantee is a critical component of an employee's wages, and it's vital that the correct rate is paid on time.

Why the fuss? Because if you miss the deadline, it's non-deductible, you'll have to lodge a superannuation guarantee statement, and there are hefty fines that cannot be remitted.

Heads Up? With data matching, employees, and retail super funds tipping off the taxman-ian devil, plus increased audit activity, no cowboy antics will be tolerated! You’ve been warned... Want to dive deeper? The taxman-ian devil has some surprisingly good resources. Check them out here.

Action: Ensure your payroll systems are up to date. If you use Xero payroll, this will be automatically updated for you.

⚡Superannuation Contribution Caps increasing⚡

The general concessional superannuation contributions cap remains at $30,000.

What is it? The concessional contributions cap is the maximum amount of before-tax super contributions you can make each year without extra tax.

Warning: Stay within the caps to avoid penalties. It’s crucial to engage with us to determine your maximum contributions each year (including super guarantee) and any unused carry forward super. More info can be found here.

Action: Get some tax planning to maximise the tax benefits of super, including timing and understanding your contribution limits. Engaging with a financial planner is also key here.

Recommendation: Wondering if you should contribute to super? Check out our blog covering all things super and its tax benefits here.

⚡Minimum Award Increases⚡

The national minimum wage in Australia as of 1 July 2025, is anticipated to rise following the annual review by the Fair Work Commission. The following figures highlight the current state and projected changes:

• Current Minimum Wage (2024): $24.10 per hour or $915.90 per 38-hour week (before tax).

• New Minimum Wage (2025): Increases to $24.94 per hour or $947.70 per 38-hour week. That's a tidy 3.5% bump thanks to the Fair Work Commission’s latest review.

• Casual Loading: Hourly rate jumps to $31.17, because flexibility deserves a little extra, right?!

When? This increase kicks in from the first full pay period starting on or after 1 July 2025. If your weekly pay period starts on Wednesday, the new rates apply from Wednesday 2 July 2025.

Warning: Payroll is high risk, and you need to get it right. Don't be a George Calombaris and plead ignorance—it won’t fly.

Action:  Update your payroll systems to include the increase from the first full pay period starting on or after 1 July 2025 to stay compliant.

Recommend: Refer to your industry award or connect with your industry body for support. And of course, we’re always here to help. If you have complex payrolls, consider using a third-party app like  Deputy, Employment Hero or Tanda for support—especially if they offer award interpretation. Feeling overwhelmed? Engage with us—we’re the payroll experts ready to support your biz. 😉 

⚡Tax Rates⚡

No new tax cuts arriving 1 July 2025, we shall have to wait another year for that ... and if you are wondering about the $1,000 instant tax deduction you shall have to wait a little longer, it's not due to kick in until the 2026/27 year, and it still needs to be legislated.

1. The 2025 tax rates are ...

⚡Bonuses for Employees⚡

This one isn’t a change—more a highlight in bright neon lights, as we see many employers incorrectly treat bonuses.

The taxman-ian devil (aka the ATO) treats bonuses like salary and wages (the ATO says, "gimme allllll of that TAX"). So, bonuses MUST be processed through your payroll system, with the net cash (gross less tax) paid to the employee. Want to know how to process a bonus in Xero? They’ve got a great article on it—check it out here.

Recommend: Read our blog here for more info.

⚡Instant Asset Write Off⚡

From 1 July 2025, the instant asset write-off threshold is set to revert to $1,000, reducing from $20,000 (unless further legislative changes are enacted). That means plant & equipment >$1,000 needs to be reported on the balance sheet and depreciated over it's effective life.

⚡FBT exemption and Plug In Hybrids⚡

Starting 1 April 2025, plug-in hybrid electric vehicles (PHEVs) will no longer be considered zero or low emissions vehicles under FBT law and thus will not be eligible for the electric car exemption. 

Employers can continue to apply the FBT exemption for PHEVs beyond 1 April 2025 if both of the following conditions are met:

1. Prior Use: The PHEV was used or available for use before 1 April 2025, and that use was exempt from FBT.

2. Financially Binding Commitment: There is a legally binding agreement in place before 1 April 2025 to continue providing the vehicle for private use on and after that date.

   
   

Heads up, any changes to this commitment—such as lease extensions, modifications to financial obligations, or changes in employer—after 1 April 2025 will result in the loss of the FBT exemption for the PHEV so be careful.

Well, that's it for now, folks. Happy New Financial Year—may it be a goodie!

As always, if you have any questions about the above, feel free to reach out to one of our oh-so-cool, not-nerdy-at-all team members today.

Disclaimer: The information provided is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice.