Federal Budget 2020/21 - JobSeeker, JobKeeper, JobMaker is the new 'Jobs and Growth’

The 2020/21 Federal budget was announced last night. These measures still need to pass parliament and may be subject to change. As legislation passes we’ll post updates.

If you would like further information please contact your accountant.

Individual Tax Rates

The tax cuts planned for future years will be brought forward to this year. The tax tables in payroll software will be updated if the legislation passes. Tax already withheld for the year won’t need to be amended.

The Low Income Tax Offset will increase from $445 to $700.

The Low and Middle Income Tax Offset remains the same, but has been extended for 2020/21.

Current Resident Tax Rates 2020/21

$0 – $18,200 Nil

$18,201 – $37,000 19c for each $1 over $18,200

$37,001 – $90,000 $3,572 plus 32.5c for each $1 over $37,000

$90,001 – $180,000 $20,797 plus 37c for each $1 over $90,000

$180,001 and over $54,097 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

Proposed Resident Tax Rates 2020/21

$0 to $18,200 Nil

$18,201 to $45,000 19c for each $1 over $18,200

$45,001 to $120,000 $5,092 plus 32.5c for each $1 over $45,000

$120,001 to $180,000 $29,467 plus 37c for each $1 over $120,000

$180,001 and over $51,667 plus 45c for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

Immediate Asset Write Off Extended

Businesses with a turnover up to $5 billion will be able to fully expense eligible depreciable assets immediately.

Assets must be acquired after 7:30pm 6th October 2020 and first used or installed by 30th June 2022.

Car limits still apply, and buildings are not eligible.

Loss Carry Back

Companies with a turnover of up to $5 billion will be able to carry back tax losses incurred up to the 2021/22 year, to profits in the 2018/19 year or later.

The tax refund will be available in the 2020/21 and 2020/22 company tax returns, if the franking account allows.

JobMaker Hiring Credit

Eligible businesses will receive $200 per week for every new eligible worker employed aged 16 to 29, or $100 per week for every new eligible worker employed aged 30 to 35. The credit will be paid for 12 months from date of employment.

Only new roles, those which increase the head count of the business, will be eligible. Businesses receiving JobKeeper at the time won’t be eligible.

An eligible worker will need to be employed for at least 20 hours per week and have been on certain welfare payments (JobSeeker, Youth Allowance, Parenting Payment) for at least 1 month out of the 3 months prior to employment.

Employers can register on the ATO website from 7th December 2020, and include new eligible employees from 7th October 2020 to 6th October 2021.

Apprentice Subsidy

Current apprentice subsidies will be extended up to a 100,000 cap. Employers will receive a subsidy of 50% of the new apprentice’s wage up to $7,000 per quarter until September 2021.

Businesses can contact their apprenticeship provider for registration details.

Additional

Free mental health programs for small business owners will receive additional funding.

Small business entity threshold will increase from $10 million to $50 million, allowing more businesses to apply certain small business concessions.