Cash Clarity - Why Early Discipline Sets the Tone for the Year

For nearly 3 years now the Government has been proposing to bring in a new tax on taxpayers with high total superannuation balances. It has been referred to as the $3 million tax. Previous versions of the draft legislation resulted in significant opposition from both industry groups and political parties due to the unfair and unintended consequences of poorly worded legislation. Most significant was the taxing of unrealised capital gains within Self-Managed Superannuation Funds (SMSFs). Prior to Christmas, the Government finally released their updated draft legislation for the introduction of the new Division 296 tax. The main points are as follows: · The introduction of the tax will commence on 1 July 2026 (rather than 1 July 2025), which means the first financial year will be the year ending 30 June 2027. · The tax of 15% will apply on the portion of earnings on total superannuation balances above $3 million. · An extra tax of 10% will now also apply on the portion of earnings on total superannuation balances above $10 million. · The $3 million and the $10 million thresholds will now be indexed in line with CPI (previous legislation had no indexation). · After the first year the calculation of the portion above the $3 million will be based on the higher of the opening and closing total superannuation balance during the financial year. This is a significant change as previously it was only based on the 30 June balance at the end of each year. This allowed taxpayers to withdraw superannuation assets prior to 30 June to reduce their member balance and therefore avoid any application of Division 296 tax. · The definition of earnings has also changed. Earnings will now be based on normal tax principles and be closer to the calculation of taxable income (which is much fairer). Unrealised capital gains will no longer be considered as part of earnings.  · Special protections will be included to ensure any capital gains accrued up to 30 June 2026 will not be included in future earnings calculations. The draft legislation was open for industry comment up to 16 January 2026. The Self-Managed Superannuation Fund (SMSF) Association and other industry groups have tabled concerns regarding the complexity and over-complicated nature of the draft legislation. In their eyes this can only lead to higher compliance costs (in addition to the tax). We will keep you informed if there are any further proposed changes prior to this legislation becoming law.

Payday Super rules introduced by the Federal Government is now legislation and we can provide more detail for the new rules for employers. Currently employers have 28 days from the end of a quarter to process the quarter’s super guarantee (SG) amounts for employees through an approved clearing house. This means the December quarter SG is due for lodgement and payment by 28 January. The Payday super rules require an employer to lodge and pay the employee SG at the same time they are lodging and paying the employees. These are the new rules: New Deadline From 1 July 2026 the deadline for super payments will be 7 days from the day an employee pay is paid. This means a super fund must record receipt of the employee SG via an approved clearing house within these 7 days. There is an exemption for new employees where an extension is provided of 20 days when it’s the first payment of a new employees super. Calculating Super Amounts From 1 July 2026 you will calculate an employees’ superannuation based on their qualifying earnings (QE). Qualifying earnings is made up of: - An employee’s Ordinary Time Earnings (OTE) - Amounts of OTE that have been used as part of a salary sacrifice arrangement for super contributions - Other amounts which are currently included in an employee’s salary or wages for SG Late Payments and Super Guarantee Charge Super Guarantee charge (SGC) applies to amounts not received by a super fund within the 7 business days of payday. From 1 July 2026 Super Guarantee charge will be: - Assessed by the ATO (previously it was self-assessed by the employer) - Calculated based on Qualifying earnings - Includes interest that compounds daily at the general interest charge rate - Includes an administrative uplift based on the employer’s history of meeting super guarantee obligations - SGC will be tax deductible - Penalties start at 25% of unpaid SGC and will increase to 50% depending on prior history Small Business Superannuation Clearing House As previously advised the small business superannuation clearing house will no longer be available. Other Important Points - Super Choice Forms are still required to be provided to new employees - Employers can request Stapled super details for new employees at the time of suppling the super choice form rather than waiting until their first pay allowing employers to gain their super details in a timelier manner. - Super funds will have 3 days to advise and return super contributions rather than the previous 20 days Our tip is to start Payday super now. If you are already using a software based super option than consider building into your pay process of processing a super payment at the same time If you are using the ATO SBCCH as your super clearing house you need to consider your options to what super clearing house you will be using from 1 July 2026. Our team at Green Taylor Partners can assist you with the move to Payday super.

The True Cost of Hiring Your First Employee in Australia Hiring your first employee is a huge milestone for any business. It often signals growth, increased demand, and the shift from “doing everything yourself” to building a team. But while many business owners budget for wages, the true cost of employing someone is far higher than just their salary. If you’re planning to hire staff members, here’s what you really need to factor into your budget. Base Wage or Salary (The Obvious Cost) This is the figure most business owners focus on first. Whether you’re paying: An hourly wage A casual rate Or a full-time salary You must ensure it meets: Fair Work minimum award rates Any applicable enterprise agreements Penalty rates, overtime, and allowances where required Superannuation (Currently 12%) On top of wages, you must pay Superannuation Guarantee (SG) for eligible employees. This is currently 12% of ordinary time earnings. Example: If your employee earns $70,000 per year, super cost = $8,400 per year (at 12%) This cost is in addition to their salary, not part of it (unless you’ve structured a total remuneration package). Workers’ Compensation Insurance Workers’ comp insurance is compulsory in every state and territory. The cost varies depending on: Your industry Your claims history The risk classification of your work Total payroll For low-risk office environments it may be modest, but for trades, transport, or physical industries it can be a significant annual expense. Payroll Tax (For Growing Businesses) You won’t pay payroll tax immediately, but once your total wages exceed your state or territory threshold, payroll tax applies. This often catches growing businesses by surprise, especially when they: Hire their second or third employee Scale quickly Employ across multiple states While it may not apply to your very first hire, it should absolutely be part of your forward planning. Leave Entitlements If you employ someone full-time or part-time, you’re responsible for: Annual leave Personal leave Public holidays Long service leave These entitlements build up as a liability on your balance sheet, even though you’re not paying them immediately. This affects your real profit and cash flow. Recruitment & Onboarding Costs Hiring isn’t free. Many businesses underestimate the upfront costs, such as: Job ads on employment platforms or recruitment agencies Time spent reviewing applications and interviewing Training and supervision during the onboarding period During the early weeks or months, your new employee may not yet be fully productive — but you’re still paying full costs. Systems, Software & Equipment Your new employee may require: A laptop, phone, or tablet Software subscriptions Uniforms or protective equipment Desk space, tools, or vehicles These costs can easily run into thousands of dollars upfront. Increased Accounting & Compliance Costs Once you employ staff, your compliance responsibilities grow: Payroll processing Single Touch Payroll (STP) reporting Superannuation processing Workers’ comp reporting Leave tracking and entitlements Many businesses require upgraded accounting support or payroll services once they take on staff. The “Real Cost” Multiplier A common rule of thumb is that the true cost of an employee is 1.25x to 1.4x their base salary once you factor in super, insurance, leave, payroll systems, and overheads. For example: Base Salary Estimated True Cost $60,000 $75,000–$84,000 $80,000 $100,000–$112,000 This is why hiring without proper cash-flow forecasting can put enormous strain on small businesses. Can Your Business Actually Afford the Hire? Before hiring, it’s worth asking: Will this employee increase revenue, or only reduce workload? How many extra sales or billable hours are needed each month to break even? Do you have 3–6 months of wage costs buffered in cash? Hiring too early can be just as risky as hiring too late. Hiring your first employee is exciting, but it’s also one of the biggest financial commitments your business will ever make. Looking beyond wages to understand the full financial impact can help you: Avoid cash-flow pressure Stay compliant Grow your business sustainably  If you’re considering your first hire, or adding extra staff, and want help modelling the true cost, forecasting cash flow, or setting up payroll properly, please feel free to contact our office to discuss this further.

Over recent years, the Victorian Government has continued to tighten and evolve its approach to property taxation. What began in 2018 with the introduction of the Vacant Residential Land Tax (VRLT) in metropolitan Melbourne has now expanded across regional Victoria, meaning more property owners are captured by these rules than ever before. Many are surprised to learn that VRLT and standard Land Tax are not the same. VRLT applies where a residential property sits unused as a home and is calculated on the capital improved value (including buildings and improvements). Traditional Land Tax, however, is based solely on the land value, essentially the value of the land in its undeveloped state. As of recent months, the Victorian Government has announced further changes to the Vacant Residential Land Tax, coming into effect from 1 January 2026. These reforms will impact owners of undeveloped land held long-term across metropolitan Melbourne. What’s Changing? Prior to 1 January 2026, VRLT does not apply to land without a home on it (sometimes called undeveloped land), commercial residential premises, residential care facilities, supported residential services, retirement villages or land in alpine resorts. From 1 January 2026, VRLT is extending to undeveloped land in metropolitan Melbourne. Where does the new VRLT apply? VRLT is expanding to include land in metropolitan Melbourne that has remained undeveloped for a continuous period of 5 years or more and is capable of residential development. This includes: land without a home on it land with a residence that was partially built but abandoned land with a residential unit, such as a unit, apartment or flat, that has a partially completed fit out but has not been occupied. Metropolitan Melbourne is made up of the Banyule, Bayside, Boroondara, Brimbank, Cardinia, Casey, Greater Dandenong, Darebin, Frankston, Glen Eira, Hobsons Bay, Hume, Kingston, Knox, Manningham, Maribyrnong, Maroondah, Melbourne, Melton, Merri-bek, Monash, Moonee Valley, Mornington Peninsula, Nillumbik, Port Phillip, Stonnington, Whitehorse, Whittlesea, Wyndham, Yarra and Yarra Ranges council areas. Timeframe Rules: The land must be vacant for a continuous period of 5 years or more to attract VRLT. This means for this type of land to become liable to VRLT in 2026, it must have been undeveloped and capable of residential development since midnight on 31 December 2020. If the land is sold, the new owner(s) has a further 5 years to begin construction before VRLT applies. This 5-year period provides adequate time for an owner of residential land to begin construction of a residence before it is regarded as vacant residential land. Exemptions may be available for: · Land being used for commercial or industrial purposes · Land intended for non-residential development with acceptable reasons for delay · Land incapable of residential development due to environmental conditions, land shape, size or natural features Undeveloped residential land that is contiguous with (adjoins) a principal place of residence. Common examples of contiguous land are a garden, swimming pool or tennis court. Crystal ball time: It will be interesting to see if the government extends this new VRLT out to regional Victoria as did the initial VRLT. What will this mean for people that are holding land parcels undeveloped long term? In the meantime, from a tax perspective, remember that if you incur VRLT or standard Land Tax, be sure to keep thorough records, as these costs will form part of your property’s cost base!