Month: March 2021

Small Business Benefits or Taxable Concerns?

Posted on by Adam_Admin

As an employee in a business, often there are perks that can come with the job. A company car, fuel money, perhaps some technology to help make things easier. Small business owners however have to be a lot more mindful of how they use the money from their business.

Any money or assets that a business has earned or possesses, is solely the property of that business. That means that there are numerous issues that can arise from dipping into these company funds.

As a business owner, it’s important to keep records and correctly report transactions if using company money or assets (e.g, company car). These can include instances such as

  • taking money out of your company for yourself or your family
  • receiving money from it (for example, as a director, shareholder or an associate)
  • using your company’s assets for private purposes.

For small businesses, this can be easily done through:

  • Salary, wages or director’s fees
  • Repayments of a loan you have previously made to the company
  • A fringe benefit, such as an employee using a company car
  • Dividends (formal distribution of the profits)
  • A loan from the company

If a business does not report correctly or keep appropriate records for transactions, an unfranked deemed dividend could be included in their assessable income (this is a bad thing) during tax time.

Here are some easy ways to avoid being put into this situation:

  • Always ensure that any company money issued is accounted for as per the previous categories.
  • Have a separate bank account for the company to pay for company expenses (not private ones!)
  • Keep proper records of all company transactions
  • Repay any loans from the company before the tax return date to avoid unwanted income tax

https://iorder.com.au/publication/Download.aspx?ProdID=75273-07.2020

Using Website Design To Promote Your Business

Posted on by Adam_Admin

Online websites are a great way to reach the digital audience and promote a business’ products and services in one place. With easy to understand website builders just a click away, a well-designed website can pull an audience in from just a glance. Bear these simple tips in mind when designing or updating a business’ website.

The site is mobile friendly

Mobile phones are essentially tiny computers in people’s pockets – it makes sense that your business’ landing page for the website (and all other pages besides) should be just as easy to read on the screen of a phone as it is on a laptop or computer screen.

The Layout

Limit the navigation menu of the website to five clearly labelled tabs with related content below them. There should always be a clear way for the user to navigate back to the landing page of the website, and a search bar is always a useful feature for users to have  to sift through content. Keep content uncluttered and accessible for users to see, and ensure that the overall layout design does not alienate the user.

Easily identifiable

Ensure that the website url (domain name) either describes the business or is the business name. Any contact information that the user might require for the business should be easily found and displayed.

Get Personal 

Online businesses need to create a user experience that resonates with their customers while keeping in touch with their brand perception. Use team photos on the about page, get personal about the business’ story and market to the audience the business as a product.

Stress in the Workplace

Posted on by Adam_Admin

It’s been a stressful time for everyone transitioning into the new normal of business. Whether working from home, remotely or trying to get used to a whole new working environment, employees are under more pressure and stress than ever before.

How to know if your stress is impacting you:

  • Feeling ‘burned out’ at work
  • Feeling anxious or depressed more frequently
  • Lack of sleep or poor sleep quality leaves you fatigued and tired.
  • Feeling angry or emotional at coworkers

Simple ways to reduce stress at work:

  • Creating a positive working environment
  • Open communication between employees and employers
  • Healthy work-life balance (leave the office at the office!)
  • Taking mental health days
  • Update workplace procedures with Wellness programs
  • More flexible working arrangements (work from home, alternative days etc.)

It’s more important than ever for employers and employees to communicate with each other when it comes to mental health. With more people suffering from added stress, an open and honest dialogue is the first step in addressing the issues. By raising concerns about your workplace’s impacts on stress and mental health, plans and procedures can be introduced to help alleviate the causes of stress.

https://insideretail.com.au/business/stress-levels-among-aussie-workers-on-the-rise-202101

Upskilling or Reskilling your Employees

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As a result of the emerging new business climate in a post-Covid environment, many jobs have had to adapt into a new structure. Since many businesses have found themselves in a more digitised environment or in jobs that have been retrenched, there’s a growing need for skilled individuals in other sectors to step up.

A heavy focus has been on reskilling or upskilling employees to assist in economic recovery. It’s no longer just a recommendation for employees to be multiskilled – it’s now more necessary than ever.

Reskilling and upskilling can take place in three ways:

  • Formal learning, like at university or TAFE
  • Non-formal learning (learning activities that don’t result in a certificate but do result in skills)
  • Informal learning (learning from colleagues, supervisors etc)

This can then lead to either viable transitions in employment, or desirable transitions in employment.

  • A viable job transition involves moving from one job to another that is highly similar in terms of required knowledge, skills, abilities, work activities, education levels and experience.
  • A desirable transition for a job seeker or worker would result in higher wages in a field of work that is expanding rather than declining

There are many schemes available to employees and employers that can assist in upskilling. Employees may look into:

  • Fee-free courses (such as those that are TAFE or university endorsed)
  • Online workshops
  • Short courses
  • Certification (such as first aid or RSA)

Employers can also look into funding schemes from the government to help support their employees during this time.

Death Benefits & Super

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Intrinsically linked with tax, superannuation is a minefield of concerns for many of us. One such concern is whether super gets taxed after a death.

When a person’s super is paid after their death it’s called a ‘death benefit’. Death benefits can be paid to a dependant only after the owner of the super dies.  A dependant is anyone who has been nominated as such by the deceased in a legal document.

Since super is designed to help fund retirement, the death benefit is made up of the deceased person’s super account balance, and if they had death insurance cover, any insured benefit.

The tax on a death benefit depends on whether:

  • you were a dependant of the deceased
  • it is paid as a lump sum or as a super income stream benefit (Essentially, a super income stream is a way of receiving regular income using the money you have built up in your super).
  • the income stream is an account-based (receive a regular payment and continue to have super invested) or a capped defined benefit income stream (where the amount of tax-free income received from these income streams is limited).
  • the super is taxable or tax-free, and whether the super fund has already paid tax on the taxable component
  • your age and the age of the deceased person when they died.

If you are a dependent of the deceased, you do not have to pay tax if you receive it as a lump sum, but if receiving it as an income stream you may need to pay.

https://www.canstar.com.au/superannuation/super-income-stream/

Self-Education Expenses

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Individuals who partake in self-education may be able to claim a deduction for their expenses if the education is related to their work or if they receive a taxable bonded scholarship.

Courses eligible for claim

You are only eligible to receive a deduction if the course has a sufficient connection:

  • To your current role and maintains or improves specific skills and knowledge that are required for your current role.
  • Results in, or will most likely result in a pay rise from your current place of employment

Courses ineligible for claim

The type of self-education courses that do not qualify for deduction include:

  • Ones only generally relates to your current role or profession
  • Ones which will allow you to transfer into a new role

Course expenses covered

If the course is eligible, then you will be able to claim against:

  • Tuition fees (if you pay them, not if somebody else pays them)
  • Computer consumables
  • Textbooks
  • Trade, professional or academic journals
  • Stationery
  • Home office running costs
  • Internet usage
  • Phone calls
  • Postage
  • Student services and amenities fees
  • Travel costs (such as car expenses, between home and place of education, between workplace and place of education – but conditions apply to this)
  • Fees payable on some Higher Education Loan Program (HELP) loans (but not the loan itself).

https://www.ato.gov.au/Individuals/Income-and-deductions/Deductions-you-can-claim/Self-education-expenses/

Pre-mixed investment options

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Super funds make investments depending on the different levels of risk chosen. 

There are 5 types of pre-set investment options which you can choose for your superfund. Remember that if you want more control and flexibility, opting for a SMSF option might be ideal for you.

Growth

  • 85% shares or property and 15% fixed interest or cash (can also be 100% shares or property)
  • Expect higher average returns (with risk of higher losses)

Balanced

  • 70% shares or property and 30% fixed interest or cash (can also be 50-50)
  • Expect reasonable returns with reduced risk compared to ‘Growth’

Conservative

  • 30% shares or property and 70% fixed interest or cash
  • Expect lower returns due to much lower risk

Cash

  • 100% in deposits with Australian deposit-taking institutions
  • Expect accumulation of interest over the years – no losses incurred

Ethical

  • Invest only in ethical companies i.e. companies that meet environmental, social and governance standards
  • Investment, risk and return can sit anywhere on the spectrum

Make your investment choice based on how much risk you are willing to take. If you feel comfortable taking greater risks with your super because you have other investments you can rely on, then the growth option might be good for you. However, if you are relying on your super to fund your retirement, then the balanced approach might be more appropriate.

What you can salary package

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Salary packaging allows you to create a ‘package’ of income and benefits. 

In your salary package, you can include benefits that you would usually pay for with your income after-tax. These include fringe benefits, exempt benefits, and super. What you can include in your salary package depends on your employer and there may be tax that you need to pay. 

Fringe benefits

  • Salary sacrifice for a car
  • Health insurance
  • Loans
  • School fees
  • Childcare fees
  • Other personal expenses

Exempt benefits

  • Portable electronic devices (laptops, phones, etc.)
  • Computer software
  • Protective clothing
  • Tools of the trade 

While your employer will pay fringe benefit tax (FBT) on the fringe benefits, they will not be required to do so for exempt benefits.

Super

You are able to put funds from your pre-tax income into your super fund account. This has benefits for you as well as your employer. This is because your super fund contributions will be taxed at 15% (same as employer’s contributions) which is lower than the marginal tax rate most individuals fall under. 

What isn’t covered in a will?

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If you are thinking about writing a will, it can be helpful to know what not to include as much as it is to know what you do need to include.

The following are things which you should not include in your will:

  • Wishes: Conveying your wishes is of course important, however, they should not be included in your will. If you have any specific wishes that you would like to be passed to your family members upon your death, you will need to do so outside of your will.
  • Conditions: You should not include conditions in your will. For example, you cannot state that your daughter needs to be married before she receives what you have allocated to her.
  • Gifts for pets: Your pets are surely important to you, but unfortunately, as much as you would like to leave a gift for them, remember that they cannot hold ownership of it. Instead, consider finding someone you trust to leave your pet with and put money aside that could contribute to your pet’s care.
  • Funeral instructions: Placing your funeral instructions in your will might mean that your family does not see them after your funeral has already been completed. This is because funeral arrangements occur before attention is paid to legal matters. Instead, discuss your funeral wishes with your family members.

How to respond to difficult employees

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Every now and then, you might come across an employee who is particularly difficult to handle. A difficult employee could be one who is incompetent, doesn’t follow instructions, behaves rudely in the office or some other behaviour alogether. However, as a business owner or manager, you must maintain professionalism when responding to such an employee.

The first thing you should do is try, once again, to listen to what your employee has to say. Once we have decided that an employee can be troublesome or difficult to handle, we might fail to make a genuine effort to listen to what they have to say. However, listening will allow you to understand how you might be able to improve the situation. You will be able to gain an understanding of the situation the employee may be in and figure out potential solutions.

Another key aspect is to document interactions with particularly difficult employees. This will be essential documentation if you decide that termination is the only way to go. Documenting incidents isn’t necessarily ‘negative’, it simply allows you to have proof of interactions that led to your professional decisions.

Set consequences if you find that the behaviour is still not changing. These consequences should be specific and set out clear expectations that the employee needs to meet. If the employee does not meet these expectations, then you need to act upon the consequences that you had stated.

Finally, don’t be afraid to fire a difficult employee. It is in no way an easy task, but if it does get to the point where termination is necessary, then don’t give yourself excuses not to do so.