What's changing for the AU 2023-24 financial year

The following changes relating to tax and payroll are set to take effect as of 1 July 2023.

Please also refer to Payroll Australia End of Financial Year Process for information about what you can do to prepare for the end of the financial year and the process for closing off the financial year in FastTrack360.

Maximum superannuation contribution base increasing to $62,270

The maximum quarterly earnings on which employers are obligated to make superannuation guarantee (SG) contributions is increasing from $60,220 to $62,270 from 1 July 2023.

What do you need to do?

In FastTrack360 you will need to add a new superannuation guarantee eligibility rule validity commencing 01/07/2023. You will need to set the Maximum Quarterly Earnings Threshold for the new validity period to a value of 62270. This can be done under Payroll Australia > Maintenance > Superannuation > Eligibility Rules.

The start date of a new validity period for the superannuation guarantee eligibility rules must be later than the last payment date of any pay batch that has already been processed. Therefore, it is important that you add the new validity period with the new maximum quarterly earnings threshold value well in advance of 1 July 2023.

For information on how to create a new superannuation guarantee eligibility rule validity period see How to Add a Set of Superannuation Guarantee Eligibility Rules - FastTrack360 Online Help - Confluence (atlassian.net).

Superannuation guarantee increase from 10.5% to 11%

The superannuation guarantee (SG) rate is legislated to change from 10.5% to 11% on 1 July 2023. Any earnings paid on or after 1 July will be subject to the increased SG rate.

What do you need to do?

You will need to update superannuation contribution rate rules to allow for the change. If you pass on superannuation costs to your clients, you may also need to update bill oncosts to allow for the change. Click here for instructions that will guide you through the process of updating superannuation contribution rate rules and bill oncosts to cater for the increase.

If you use custom bill formulas that reference a hard-coded bill oncost value for superannuation, you may need to review the formulas to ensure you are passing on the correct bill oncost amount to your clients from 1 July 2023.

The contribution rate change can be configured prior to downloading the tax tables for the 2023-24 financial year as the contribution rate is not dependent on tax rates/tax periods.

Payments on termination of employment

When making payments on termination of a payee’s employment, be aware of the following:

The employment termination payment (ETP) cap amount for the 2023-24 financial year is $235,000.
The tax-free amount for a genuine redundancy or early retirement payment for the 2023-24 financial year is $11,985 plus $5,994 for every year of service.

Tax update

The 2023-24 Federal budget did not include any legislated changes to tax rates for the 2023-24 financial year. As such, the only tax rate changes that apply for 2023-24 are the annually indexed increases to the Study and Training Support Loan (STSL) repayment thresholds. The new STSL repayment thresholds for payments made on or after 1 July 2023 are as follows (based on weekly earnings):

$990.00 (increased from $930.00) - if the tax-free threshold is claimed or the payee is a foreign resident
$640.00 (increased from $580.00) - where the tax-free threshold is not claimed.

FastTrack will make updated tax rates for the 2023-24 financial year, which include the abovementioned change, available for download via the Tax Maintenance Service from 23/06/2023.