Australian small and medium business owners are bracing for a compliance avalanche as more than a dozen new or updated laws come into force on July 1.
The longest list of regulatory changes in years will require major alterations to the way businesses pay staff, market their products and services, and manage taxes.
Recently, the beginning of the financial year has previously brought about numerical resets – such as higher superannuation guarantees and minimum wages – that payroll software absorbed invisibly. But this year demands owners overhaul parts of their business, at a time of rising costs and economic uncertainty.
Payday Super And Higher Wages In Payroll Double-Hit
The most consequential changes influence the way businesses pay their people and fund superannuation.
Payday Super is the headline reform. From July 1, employers must pay super at the same time as wages rather than quarterly. While the change does not alter the amount of super owed, businesses lose the legal three-month buffer some relied upon to manage working capital. Employment Hero research suggests many SMEs – up to 2 in 5 – are still unsure whether they will have the liquidity to include super in every pay run.
“Payday Super is a huge change for every single business,” says Rob Dunn, General Manager, Payments, Superannuation and Benefits at Employment Hero. “Our modelling showed businesses need an average of $124,000 in additional working capital during the transition, and with inflation and rising costs, many businesses face a confluence of factors that could considerably impact their cashflow.”
While the ATO has promised leniency for genuine mistakes, penalties will apply for late payments, meaning payroll errors will carry sharper consequences than under the current quarterly model. Compounding the pressure, the Small Business Superannuation Clearing House permanently closes on the same date.
The ATO’s free portal, used by employers with 19 or fewer staff or annual turnover below $10 million, will stop accepting super payments and any business still relying on it must find an alternative super payment solution and finalise outstanding payments before the shutdown.
Placing further demands on payroll systems, the national minimum wage rises on July 1 by 4.75 per cent to $26.44 per hour or $1,005.00 per week, as a result of the Fair Work Commission’s Annual Wage Review. All modern award minimum rates will also increase.
New Rules Boost Transparency But Add To Admin
A second cluster of changes moves beyond payroll into daily business operations.
The SMS Sender ID Register, administered by the Australian Communications and Media Authority, requires any business that sends branded SMS messages – with their business name at the top – to register its sender ID through its telco provider or messaging platform before July 1.
Unregistered sender IDs will be marked as ‘Unverified’ and risk being blocked entirely. “Sender IDs are used so recipients can quickly identify who a message is from. They may be used by a wide range of family and small businesses such as dentists, GPs, solicitors, schools and childcare centres and franchisees,” says ACMA Deputy Chair Adam Suckling. “Messages labelled ‘Unverified’ may be ignored or deleted by customers, creating reputational risks and unwanted disruptions for businesses.”
New seafood labelling laws place a fresh compliance burden on hospitality businesses, including restaurants, cafes, pubs and takeaway outlets, to display the country of origin for all seafood served. Menus, display cabinets and signage must be altered to inform diners whether seafood is Australian, imported or of mixed origin.
This requires physical audits of printed materials and supply chains. Businesses that source seafood from multiple suppliers face an additional layer of complexity in verifying sources of origin and retaining records such as invoices for three months.
Small and medium enterprises will be among 100,000 businesses that will be subject to new anti-money laundering rules from July 1. Many firms in the accounting, real estate, conveyancing and legal sectors will face mandatory compliance obligations if they manage transactions, handle property sales or set up corporate trusts, as part of a push to stamp out organised crime.
Affected businesses must officially register with AUSTRAC, implement mandatory customer identity verification processes and establish pipelines to report unusual or threshold transactions to the government. For businesses unused to operating in a federal financial intelligence framework, new client onboarding and auditing procedures will need to be built from scratch.
Financial Year Brings Small Business Tax Changes
A third group of changes affects tax management and workforce planning for small and medium businesses. Several measures are a result of the May federal budget.
The $20,000 instant asset write-off becomes permanent for businesses with aggregated annual turnover below $10 million. The ATO says eligible businesses can immediately deduct the full cost of assets costing less than $20,000 each, rather than depreciating them over several years. After years of temporary extensions, the measure is now a fixed part of the tax landscape.
The loss carry back tax offset also returns, allowing eligible companies to offset tax losses against profits from earlier income years. This is relevant for businesses that traded profitably in prior years but face a current-year loss, providing a potential cash-flow benefit.
Additionally, in a red-tape rollback, 497 nuisance customs tariffs will be abolished on an array of imported business inputs, ranging from tools and commercial tyres to air conditioners, stripping away complex compliance costs for importing SMEs.
Tradies are also set to benefit as all mandatory Australian Standards – which have historically cost small electrical, plumbing, and building firms up to $1,600 a year to purchase – can be downloaded at no cost from July 1. But there will be a modest increase in ASIC fees for business name registrations, company registrations and other corporate filings increase in line with CPI.
On the workforce front, government-funded Paid Parental Leave extends from 24 to 26 weeks. While employers won’t foot the bill for the payments, they will need to plan for longer staff absences, backfill arrangements and update leave administration processes.
