The True Cost of Hiring Your First Employee in Australia

What is the Xero Me App? Xero Me is an employee self-service app that connects Xero Payroll and Xero Expenses. It is separate from your business and financial information. Your employees can only view their own timesheets, expense claims, leave, and pay, using the Xero Me app. Key Functions of the App: - Timesheets: employees can enter, edit, and submit timesheets for approval using start and end times or total hours worked. - Leave management: employees can submit leave requests and monitor their leave balances. - Payslips: provides access to view and download past and current payslips. - Expense claims: employees can submit expenses, take pictures of receipts, and monitor the status of reimbursements. - Payroll admin: assists managers to approve timesheets and leave requests on the go. Benefits: - Employees submit their own timesheets using Xero Me, which eliminates the need for you to manually enter data each time payroll is processed. - You spend less time chasing your employees for timesheets and expense claims. - Employees can only access their own payroll information, and all data is stored securely. Xero Me is included in Xero plans that feature payroll and is available on iOS and Android devices. Inviting employees to use Xero Me:  Under the payroll tab, in the employees’ section, select the employee you wish to invite (you will need to do this for each employee), scroll down in the details tab, and tick the box ‘Invite employee to Xero Me.’ Once the employee/’s have accepted the email invite, and created a login, they can access Xero Me via the web portal or on the go with the mobile app. Refer to the below link for more information. https://www.xero.com/au/xero-me/

Budgeting is an essential part of business planning. A well-prepared budget helps leaders manage finances, allocate resources wisely, and stay on track to achieve their business goals. Here are 6 practical tips to follow to create a budget that works. 1. Set Clear Goals Start with the end in mind. Define the financial objectives for the upcoming period — whether that’s growing revenue, reducing costs, or expanding operations. Clear goals give your budget direction. For example, if your goal is to increase sales by 15% over the next year, you might allocate funds to targeted marketing campaigns, new sales tools, or hiring additional account managers. If your priority is cutting costs by 5%, your budget will focus on efficiency, renegotiating supplier contracts, or pausing discretionary spending. 2. Track Income and Expenses Keep detailed records of all revenue streams and expenses. This helps identify patterns and areas for improvement, which can be factored into your next budget. For example, there are some businesses that spend heavily on marketing channels that don’t generate leads. Tracking and analysing results allowed us to reallocate funds to higher-performing activities, improving return on investment. 3. Be Realistic (Even Conservative) Optimism is great, but overestimating revenue or underestimating costs is a common trap that can create financial pressure. Here are some recommended multiple scenarios: Expected: the most likely outcome Conservative: lower revenue, higher costs Aggressive: upside potential Plan based on the conservative scenario. It gives breathing room if sales fall short or unexpected expenses arise. 4. Prioritise Essential Expenses Some costs are non-negotiable. Identify essential expenses, payroll, rent, utilities, and core operational costs, and make sure they're covered before allocating money elsewhere. For example, a manufacturing business should prioritise raw materials and production costs over a website redesign or an internal newsletter. Protecting essentials keeps the business running smoothly, even if revenue dips. 5. Plan for Contingencies Unexpected events happen. Projects can expand, clients may delay payments, or equipment might fail. Include a contingency fund in your budget to handle surprises without disrupting operations. For instance, a service business can use the contingency to hire extra staff if a project suddenly requires more resources, ensuring deadlines are met. 6. Review and Adjust Regularly A budget isn’t a “set-and-forget” document. Review it regularly, at least monthly, and adjust based on actual results and market conditions. This keeps the budget relevant and ensures you can make informed decisions rather than reacting to surprises. A budget done well helps leaders commit to assumptions, make smarter decisions, and optimise performance as circumstances change. Follow these tips to prepare a budget that actually drives your business forward.

Tax is an unavoidable part of life. However, with proactive planning, you can manage you tax obligations more effectively, reduce unnecessary expenses, and make well-informed financial decisions. Tax planning is not just for large businesses - but for individuals, families and businesses of all size who can benefit from taking a structured approach. Maximise your Deductions Many taxpayers miss out on deductions simply because they are unaware of what is available to them. Ongoing tax planning ensures you are claiming everything you are entitled to, helping you legally reduce your overall tax liability. Plan ahead with Confidence Tax planning isn’t just about this year’s taxes; it’s also about planning for the future. By making smart decisions now, you can set yourself up for a lower tax bill in the years to come. Avoid Costly Surprises Unexpected tax bills can place unnecessary pressure on cash flow. By reviewing your financial position throughout the year, you can estimate your tax liability early and prepare accordingly.  Stay Compliant Tax legislation is constantly changing, and it can be hard to keep up with all the latest updates. Tax planning helps ensure that you stay compliant while still minimizing your tax liability. Remember, the goal of tax planning isn’t to avoid paying taxes altogether; it’s simply to pay your fair share while keeping as much money in your pocket as possible.

When you take money out of your company for personal use, it’s not automatically a tax-free loan. To the ATO, that payment must be one of these: Salary and wages A declared dividend A properly set up loan If it’s none of the above, the ATO can treat the amount as a dividend and add it to your personal taxable income. This rule is called Division 7A. A common situation is when a business owner transfers money from the company account to their own account, planning to “put it back later”. Without the right paperwork, the ATO may say that money was actually a dividend, not a loan. For example: You take $50,000 from your company to renovate your home. If you do nothing, that $50,000 can be treated as a dividend. You will need to pay personal income tax on the full $50,000, and you don’t get any franking credits to reduce the tax. To avoid this, you can either: pay the $50,000 back to the company before the company’s tax return is due, or put a formal Division 7A loan in place. A proper Division 7A loan means: a written loan agreement interest charged at the ATO rate minimum yearly repayments over up to 7 years (or longer if secured by property) If you set up the loan correctly, you might repay roughly $9,000 per year (principal plus interest, depending on the rate and term). As long as you make those repayments on time each year, the ATO treats it as a loan, not a dividend. Problems usually happen when people: take money out casually don’t sign a loan agreement miss the required yearly repayment If a repayment is missed, the unpaid amount for that year can still be treated as a taxable dividend. In short, company money is not your personal spending account. If you use company funds for private purposes, either repay it quickly or set up a proper loan and stick to the repayments, or you risk an unexpected personal tax bill.  If you have any questions or would like to discuss how Division 7A applies to your situation, please feel free to contact our office for appointments.