2014 BudgetTuesday, 10th June 2014
The Federal Government announced the 2014/15 Budget on 13 May 2014 and as always, there were some talking points.
This blog post will outline some of the changes that will impact our industry in particular.
Temporary Budget Repair Levy
The government will introduce a temporary levy of 2% on taxable incomes above $180,000.
This levy has already been passed through the House of Representatives and is expected to be passed through the Senate shortly. The levy will apply from 1 July 2014 and will remain in place for 3 years.
As such, the FBT rate will increase from 47% to 49% from 1 April 2015, in line with the Temporary Budget Repair Levy.
However, the cash value received by those working for Public Benevolent Institutions, not-for-profit organisations and other tax-exempt entities will be protected by increasing the annual FBT caps.
The super guarantee (SG) rate will increase to 9.5% for the 2014/15 financial year and will be frozen at this rate until 30 June 2018.
The SG rate will then increase by 0.5% each year until it reaches 12% from 2022-23.
For those who salary package (http://www.salarymasters.com.au/) additional super contributions, there have been some changes to the annual capped limits.
For the 2014/15 financial year, the caps have changed as follows:
Aged 48 and under on 30 June 2014: $30,000 contribution cap
Aged 49 and over on 30 June 2014: $35,000 contribution cap
It is important to remember that employer super guarantee contributions are also included in these caps.
There were no changes to novated leasing and the statutory method in particular. Changes proposed by the previous federal government last year did not proceed with the election of the Coalition government. Employees are therefore still able to utilise the statutory method (and the concessional rate of 20%) for a novated lease.
As always, if you have any questions about your salary packaging arrangements, please do not hesitate to contact one of our friendly staff.