The Australian Government announced its 2016 Federal Budget last week, and there was some valuable news for small business owners. We’ve outlined three key points to keep in mind while planning your next financial year.
Good news! Beginning July 1, the government will be expanding its definition of ‘small business’ to include any company with an annual turnover under $10 million. This shift will allow more businesses to qualify for the new, lower tax rate of 27.5%.
Easier, bigger write-offs
Need to buy a new espresso machine? What about new hardware for your point-of-sale system? Lawmakers made changes to the Instant Asset Write Off system just one year after it was first introduced. After July 1, small businesses (see above) will be able to write off all business equipment valued at up to $20,000, rather than having to depreciate those purchases over several years.
Help paying interns
The federal government is incentivising small business owners to hire younger employees through internships, with the new Youth Jobs PATH program. This program is designed to help young job seekers gain practical, relevant skills such as computer literacy and teamwork prior to entering the workforce — ultimately reducing the risk and cost associated with hiring junior staff members down the road. Businesses that take on new interns will receive an upfront payment of $1,000, and 120,000 positions will be made available over the next four years.
To fully understand the impact this year’s federal budget will have on your business, you may want to schedule time to speak with your accountant or financial advisor. You should also refer to the Australian government’s 2016 Budget website for further information. Square does not accept responsibility for the accuracy of the information presented in this article.