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Federal Budget 2023-24: Employment taxes

Federal Budget 2023-24: Employment taxes

From 1 July 2026, employers will be required to pay employees’ superannuation guarantee (SG) entitlements on the same day they pay salary and wages. Also, the Government is seeking to remove the exemption from fringe benefits tax (FBT) for plug-in hybrid electric vehicles.

Changes in SG Pay Dates

With effect from 1 July 2026, employers will be required to make SG payments on the same day they pay salary and wages to employees. This is a change from the current rules which state, employers are only required to pay employees’ SG entitlements on a quarterly basis.

This change is designed to increase visibility over whether SG entitlements have been paid and to enable the ATO to better target and recover unpaid superannuation. The increased frequency of contributions is also likely to have a positive impact on employees’ overall superannuation balances.

In designing amendments necessary to effect the change in payment frequency, the Government will consult with industry and all relevant stakeholders. We believe this presents an opportunity for the Government to also address some of the current anomalies and inequities in the SG payment system.

The changes to payment frequency will also require employers  to address their current cash flow practices and payroll processes in order to ensure they can meet their new SG obligations.

FBT exemption sunset on 1 April 2025 for plug-in hybrid electric vehicles

Plug-in hybrid electric vehicles (PHEV) will no longer be eligible for an exemption from FBT from 1 April 2025 under the changes proposed by the Government. Currently, PHEV qualify for an exemption from FBT along with other low emissions vehicles such as battery electric cars and hydrogen cell cars.

Where there are pre-existing arrangements involving PHEV that were entered into before 1 April 2025, they will continue to remain eligible for the FBT exemption, even after 1 April 2025.

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This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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