Key Rates and Thresholds FY 2023

Fair Work Australia and the ATO have released new Key Rates and Thresholds applicable for the Financial Year 2023. Here are some of the most important ones that affect small businesses.

Payroll Key Rates and Thresholds

Fair Work Minimum Wage and Award Pay Conditions

The National Minimum Wage has increased for FY 2023 by 5.2%. The new Minimum Wage Pay Rates are:

• $21.38 Hourly Rate (Full-Time Employees*)
• $812.44 Weekly Salary (Full-Time Employees*)
  *25% Loading still applies to Casual Employment

However, a reduced percentage increase (4.6%) will apply to all Modern Awards.

Allowances

Laundry and Dry Cleaning Allowance

The annual tax-free laundry allowance remains at $150 per annum.

Car, Meals and Travel Allowances

The cents per km allowance has increased to 78 cents per Km (up to a maximum of 5,000 Km per vehicle).

The Overtime Meal Allowance remains at $32.50 per meal.

The ATO has not yet updated the rates for the reasonable travel overnight allowances applicable to both metropolitan cities and country centres. Once they publish the update, we will update the link on this page.

ATO – Car Km Allowances

ATO – Dry Cleaning and Laundry Allowances

ATO – Overnight Travel Allowances

Superannuation  Key Rates and Thresholds

The percentage of Superannuation Contribution Guarantee has increased to 10.5% of Ordinary Time Earnings.

The minimum monthly threshold of $450 per month has been removed as of 1st July 2022.

The quarterly superannuation maximum contribution cap has increased for FY 2023 to $60,220 wages per quarter (allowing a maximum amount of Quarterly Superannuation Guarantee Contribution of $6,323.10).

The annual Concessional Contribution remains at $27,500 per annum with the ability to carry forward unpaid contributions for a 5 year period. The Annual Non-Concessional Contribution cap will also remain at $110,000.

More detailed information on the FY2023 Superannuation increases and future changes to Superannuation is available in a separate blog post on our website.

ATO – Superannuation Key Rates and Thresholds

Lump Sums and Employment Terminations

Genuine Redundancy and Early Retirement Payment Limits
The limit of the Tax-Free Component for Genuine Redundancy and Early Retirement Scheme has increased for the FY 2023 to the following:

• Base Limit: $11,591
• Each Year of Completed Service: $5,797

Death & Life Benefits ETP & Whole of Income Cap

The ETP cap for both Death & Life Benefits has increased for FY 2023 to $230,000.

The Whole of Income Cap stays at $180,000.

ATO – Tax-Free on Genuine Redundancy

ATO – ETP and Whole of Income Caps

Payroll Tax Rates and Thresholds

The applicable Payroll Tax rates and thresholds for the FY 2023 are the following:

• ACT – The Payroll Tax rate and thresholds remain unchanged at 6.85% with an annual threshold of $2 million in annual Australian Taxable wages;
• NSW – The Payroll Tax rate is set to increase to 5.45% whilst the annual threshold remains unchanged at $1.2 million in annual Australian Taxable wages;
• NT – The Payroll Tax rate and thresholds remain unchanged at 5.50% with an annual threshold of $1.5 million in annual Australian Taxable wages;
• QLD – The Payroll Tax rate and thresholds remain unchanged from 4.75% to 4.95% with an annual threshold of $1.3 million in annual Australian Taxable wages;
• SA – The Payroll Tax rate and thresholds remain unchanged at a maximum of 4.95% with an annual threshold of $1.5 million in annual Australian Taxable wages;
• TAS – The Payroll Tax rate and thresholds remain unchanged at 6.1% with an annual threshold of $2 million in annual Australian Taxable wages;
• VIC – The Payroll Tax rate and thresholds remain unchanged at 4.85% or 2.425% (applicable to regional employers) with an annual threshold of $2 million in annual Australian Taxable wages;
• WA – The Payroll Tax rate and thresholds remain unchanged at 5.5% with an annual threshold of $1 million in annual Australian Taxable wages;

Motor Vehicles Key Rates & Thresholds

The Income Tax and GST Threshold for purchasing a new car has increased for FY 2023 to $64,741.

The Luxury Car Threshold for the FY 2023 has increased to the following:

• $71,849 (Non-Fuel-efficient vehicles)
• $84,916 (Fuel-efficient vehicles)

ATO – Car Cost Limits

ATO – GST on Motor Vehicles

ATO – Luxury Car Tax Rates and Thresholds

Instant Asset Write-Off

No formal updates at this stage for Instant Asset Write-Off. For assets first used or installed ready for use between 12 March 2020 until 30 June 2021, and purchased by 31 December 2020, the instant asset write-off:

• The threshold amount for each asset is $150,000
• Eligibility extends to businesses with an aggregated turnover of less than $500 million.

ATO – Instant Asset Write-Off

Is your Accounting Software up to date? Compare the latest updates on the ATO and Fair Work Rates and Thresholds with the FY 2022 Key Pay Rates & Thresholds.

Disclaimer

This blog and attached resources are of general nature designed for informational and educational purposes only. They should not be construed as professional financial advice for your individual business. Should you need such advice, consult a licensed financial or tax advisor.