Issue 109 - October 2016
If you've allowed your staff to accumulate excess Annual and Long Service Leave, then this tip is for you. Implement a leave schedule ASAP and create a healthier business.
Co-ordinating staff leave is a key activity for you as business owner. A well-managed leave schedule meets the needs of your business as well as your staff. Your business can be staffed appropriately for periods of high or low activity and it encourages your staff to perform at their best by taking time out to rest while maintaining a healthy work-life balance.
It's healthier for your business too. Unused Long Service Leave and Annual Leave are recorded as liabilities on your business' Balance Sheet. If the amount of unused leave is excessive, it can be unmanageable for your business in terms of staff resourcing should an employee take extended leave.
Long Service Leave entitlements are governed by state and territory laws, so you need to be aware of the legislation according to your employees' location.
Please note that different rules may apply for construction industry workers, workers employed in the South Australian public service or the Commonwealth Government as well as workers who had their entitlements derived from a federal award or agreement in existence prior to 1 January 2010. For example, in South Australia, an employee can take or cash out their Long Service Leave entitlement after they have completed 10 years of service. If agreement is reached between the employer and employee, long service leave can also be taken between 7 and 10 years of completed service. In SA, an employee can be directed to take Long Service Leave, provided the employer gives them at least 60 days' notice.
Annual Leave entitlements, on the other hand, are governed by the Fair Work Act 2009. Award-free employees can come to an agreement with their employer and cash out some accumulated Annual Leave, as long as specific conditions are met, such as keeping a remaining balance of 4 weeks. Most awards now allow employees to cash out annual leave, if they have at least 4 weeks annual leave left after the cash out, have a signed written agreement with their employer and don't cash out more than 2 weeks in a 12 month period.
Brentnalls SA now has access to an independent outsourced service, as part of our key alliances, that provides information on all aspects of HR, employment relations, people management and Australian employment laws. The service covers Long Service Leave and Annual Leave in addition to topics such as pay rates; hiring employees and employment contracts; employee records and payslips; the National Employment Standards (NES); Fair Work Act 2009; disciplinary action and dismissals; bullying, harassment, written warnings and unfair dismissal. Please contact us if you require any assistance.
Salary sacrifice arrangements are commonly referred to as salary packaging. It is an arrangement between an employer and an employee, where the employee agrees to forego part of their entitlement to salary or wages in return for the employer providing them with benefits of a similar value. Salary sacrificing reduces the employee's taxable income and so reduces the amount of income tax paid by that employee.
An employee must enter into a salary sacrifice arrangement before earning the income; it can never be retrospective. It is usually more effective for employees on higher incomes as fringe benefits tax is calculated based on the top marginal tax rate. There is no restriction on what can be sacrificed (other than the superannuation contribution caps) and the benefits generally provided in these arrangements fall into three categories: fringe benefits, exempt benefits and superannuation.
The most common fringe benefits are car fringe benefits including novated leases, expense payment fringe benefits (e.g. private health insurance, children's' school fees), car parking fringe benefits and entertainment.
An employer is required to pay fringe benefits tax (FBT) on the benefits provided to the employees. The value of some of the benefits will need to be listed on the employee's PAYG payment summary and although they are not taxable to the employee they are used to assess various levies, offset, child support obligations and other government benefits. Some fringe benefits will not appear on the end of year payment summary if they are non-reportable fringe benefits.
Please note that when entering a salary sacrifice arrangement with an employee, the employer should not be worse off as the cost of FBT is borne by the employee by forming part of their total remuneration package.
The most common exempt benefits are: living away from home allowance, portable electronic devices, protective clothing and tools of trade. An employer will not have to pay FBT on these exempt benefits and the value of the benefits will not need to be listed on the employee's PAYG payment summary.
Note employers who are not-for-profit entities or public benevolent institutions also receive further FBT rebates or exemptions so it may be beneficial for employees of these organisations to salary sacrifice even when on lower salary packages.
Example-Car Fringe Benefit
Jane earns $150,000 per annum and is considering salary packaging. She enters a novated lease with a supplier for a vehicle worth $35,000. The cost of the lease and other associated running costs total $12,500 per annum (including GST).
The taxable value of the car fringe benefit will be $7,000 ($35,000 x 20% - statutory method). Jane will sacrifice $18,725 (running costs excluding GST and FBT of $7,362) if no employee contributions are made towards the benefit of $5,000 (portion of GST exclusive running costs only) if Jane makes contributions of $7,000 towards the benefit.
The following table illustrates how salary sacrificing and employee contributions work by comparing the net disposable income for Jane in the three scenarios.
Just the mention of the words 'retirement planning' makes many people feel exhausted. Some believe retirement planning should start at the ripe old age of 45! There is now sufficient research to prove that those who have commenced wealth accumulation planning at 25 or earlier are ahead of the pack.
Positive Retirement Planning
The best thing you can do is get on the front foot. Brentnalls SA can help you summarise your current position and take stock of where you are at – this is the best place to start.
The next step is to discuss some goals including where you see yourself over the next 10-20 years, we can then assist you to put a plan in place to achieve them. Brentnalls SA has built valued relationships with independent experts such as financial planners, lawyers, property experts and stockbrokers who can work together with you to make your plan a reality.
We will then assist you to regularly review your progress until your retirement objectives are met. It's time to get ahead and make a start by contacting your Brentnalls SA team member now.
Rebranding can be one of the most rewarding decisions a business owner can make but it does have its risks. When looking at the idea of rebranding, businesses need to ensure they are doing it for the right reasons. Whether you decide to rebrand due to evolving customer needs or competition, ensure you have a clear strategy. A successful rebrand requires planning and consideration of the risks involved. Here are some things to consider when you are looking to rebrand:
Before embarking on your rebranding, understand how current stakeholders perceive your brand compared to how you would like your brand to be perceived. Conduct market research into your customer's current wants and needs and evaluate how they and other stakeholders will view a rebrand. Take the time to investigate how your brand currently compares against your competition so you can better understand what sets your brand apart and emphasise this when rebranding.
It's highly important you communicate your rebrand with all business stakeholders. People are more likely to be receptive to changes if they are clearly explained. Staff should be informed of any changes or implications that will impact them from the very beginning, as they will become your brand advocates. Identify what aspects of your business are changing, what is staying the same and create a timeline for the rebranding process. This demonstrates you care about your customers, suppliers and staff and encourage some valuable feedback along the way.
Strategy In undertaking the rebranding process, you need to ensure you develop a market strategy to promote and strengthen your new brand. Your marketing strategy should concentrate on the core values of your brand, your main message and why you have made changes to your brand.
An innovative and original marketing strategy can work wonders for a rebrand but ensure anything implemented is in line with your overall brand. Some examples of internal campaigns you could use are meetings, videos, blogs and emails to employees announcing the change. You may consider a launch party where clients, employees, media and community members are invited to celebrate the brand rollout.
Safe Ag Systems is an online solution and application which assists agribusinesses with managing their work health and safety requirements. Developed by Farmers on Yorke Peninsula, and with assistance from work health and safety regulators in Australia, the product can be accessed anywhere on any device.
The product includes:
- WHS Policies – readily available for edit to your specific needs
- WHS Inductions – editable and pre-populated template to make this process efficient
- Emergency Management – distress signal sent at a touch of a button
- Who's on Farm – Keep track of worker's and visitors
- Action Manager – Action lists for keeping compliant
- Inventory – Assists with maintenance of plant
- Training Register – Evidence of ongoing competence
- Initial WHS Inspection – assessment of what action items are required
Each agribusiness is different so initial setup will tailor the product to your specific needs and 24 hours support is available. Any updates in work health and safety policies are monitored and made available to business through the news feed.
Pricing (GST exclusive):
1. $70 per month or $700 per annum – 10 users
2. $120 per month or $1,200 per annum – 20 users
3. $170 per month or $1,700 per annum – unlimited users
Congratulations to our clients GJK Facility Services in winning the ABA100 Community Contribution and ABA100 Sustainability at the 2016 Australian Business Awards.
Congratulations Geoff & Daniel Schell on expanding their very successful Ray White residential and rural real estate business with the launch of Ray White Rural South Australia franchise.
Congratulations to David Nelson on winning the 2016 NAB FP Principals Franchise of the Year, as well as being a semi-finalist in the 2016 AFA Adviser of the Year Award.
We welcome Jade Giang who has joined as us an undergraduate accountant and Wen Yee who has joined us as a senior accountant.
Congratulations to Sally Storey and her husband David on the birth of their daughter Alexandra.
Congratulations to Kurtis Wilson on being selected in the state senior men's hockey squad for the national championships which were held in Perth in September.
Brentnalls SA is proud to sponsor Van D'am Racing; they have recently taken part in their NRS debut in the Great South Coast.
Congratulations to Shali Manolev and her daughter Akira for raising $843.60 in the City to Bay fundraising for SIDS & Kids SA. They were a part of Team Indie Rose which overall raised $11,299.05. SIDS & Kids SA provides support for individuals and families who experience the sudden death of a child up to six years of age.
If you would like to donate please visit www.sidsandkids.org/offices/south-australia
We raised $601.00 for Motor Neurone Disease of SA recently by holding a morning tea to raise awareness and funds for this great cause.
This month we are proud to be donating toward Christmas Party for Special Children, a charity giving children with special needs the opportunity to gather and share the magic of the Festive Season with a group larger than their immediate circle of family and carers.
|I joined the Super Team in November 2014 after my first year of studying Commerce at the University of Adelaide.
I enjoy the challenging and engaging work that I do at Brentnalls SA and have learnt so much in my time here.
I am a member of the Adelaide University Film Society and one of my favourite films is Magnolia. Outside of work and study, I am usually found watching movies or TV shows, cooking or eating food.
In the warmer weather, I like to ride my bike and get outside as much as possible.