The new financial year is just days away. Not only does tax season officially commence in two days, but there are a suite of laws that are coming into effect from 1 July Aussies should know about.
Most of these changes will directly affect your wallet, from superannuation and tax changes, to higher Medicare and public transport costs.
“Now is a good time to be across the financial changes that are coming at the end of the financial year. You never know what might impact your hip pocket,” said Finder money expert Allison Banney.
“Regardless of the changing laws, the end of financial year is a great time to get on top of your finances.”
Here’s everything you need to know about what will be new from Thursday 1 July onwards:
There are several tax-related changes coming into effect, many of which Yahoo Finance has already summarised for you here.
The one most Australians are aware of and looking forward to is the $1,080 ‘tax cut’, which passed Parliament earlier this month. (However, it’s important to know however that this doesn’t mean you get an extra $1,080 on top of your tax refund – it’s a reduction of the tax you have to pay anyway.)
READ MORE: Surprising date you’ll get $1,080 tax breaks
From 1 July, it’ll get harder to claim work-from-home expenses – and you’ll be claiming less, too. The ATO’s 80-cents-per-hour shortcut was extended until 30 June, but is scheduled to end in the new financial year. You’ll still have the fixed-rate method of 52 cents available to you, if you don’t want to go through the more paperwork-heavy actual cost method.
From 1 July, the national superannuation guarantee (SG) rate will rise from 9.5 per cent to 10 per cent. This has implications for your pay, and either means you’ll get more in your nest egg, or your take-home pay will actually look like it’s reducing.
Courtesy of tax expert Adrian Raftery, we know you’ll also be allowed to make bigger concessional contributions to your super, which are contributions made from your before-income tax. The limit will rise from $25,000 to $27,500 for individuals, and the non-concessional contribution limit will also increase from $100,000 to $110,000.
The transfer balance cap, which is the amount of superannuation you can transfer into a retirement pension, will be lifted from $1.6 million to $1.7 million.
The Family Home Guarantee will begin from 1 July 2021, supporting 10,000 single parents wanting to get a foot on the property ladder.
The First Home Loan Deposit Scheme has also been extended into the new financial year, where the government will guarantee up to 15 per cent of the property’s price for a further 10,000 eligible first home buyers.
As of 1 July 2021, all businesses must be on the Single Touch Payroll system.
The corporate tax rate for small-medium businesses will also drop from 26 to 25 per cent.
And beer may get cheaper, with the excise refund cap for small breweries and distilleries being raised.
If you run a small-medium business with turnover of less than $20 million, you can get any expenses you incur on marketing materials (like marketing consultant expenses or promotional ads) through the Export Market Development Grant. Instead of being a program where businesses are reimbursed for their promotional expenses, the program will be eligibility-based from 1 July 2021.
Wage subsidies delivered by employment service providers will be increased, where employers can receive up to $10,000 if they hire workers who are:
15 to 29 years of age,
50 years of age and over,
a parent, or
registered with an employment services provider for 12 months or more.
Some Australians could pay thousands of dollars more for certain types of surgeries from 1 July. There was a review into the Medicare Benefits Schedule (MBS), which is a list of 5,700 medical services that are subsidised by the Commonwealth Government.
But a 2015-2020 review into the MBS led to changes for 900 items on the MBS, affecting rebates on orthopaedic, general and heart surgery. There are estimations this could cost patients $10,000 out-of-pocket, according to 9News. The Australian Medical Association is worried that there hasn’t been enough time to prepare for these changes due to the Government’s “poor implementation”.
If you turned 31 before 1 July, you’ll now have to pay an extra 2 per cent loading on Lifetime Health Cover – on top of your premium – for every year you’re over 30 when you decide to take out hospital cover later in life. The ATO has more on how this works and who this applies to.
We’ve got our fingers crossed that the price of a cold one will go down. This is because the tax burden on small breweries and distilleries is easing from 1 July. Assistant Treasurer Michael Sukkar announced it here.
A few new changes are coming in the new financial year:
Opal fares are set to increase by 1.5 per cent because of inflation;
NSW public servants are set to get a 2.5 per cent pay rise, though this does come off the back of a capped wage increase from last year;
Council rates for NSW residents will increase by 2 per cent in the new financial year.
More to come.
Did we miss anything, or have questions about Tax Time 2021? Let us know at firstname.lastname@example.org.