Speed hack

The ability to run calculations in your head is a helpful skill. It’s tempting to rely on calculators as it’s easier but here are a few of the reasons why it’s helpful to run calculations in your head:
– It’s a form of mental exercise
– Errors in computer calculations stand out more. If your mental calculation comes to say \$10,000 and the spreadsheet says \$500 then there is often an error in the spreadsheet variables which you may not find without running a mental check.
– It’s great for negotiations. You’ll be able to run numbers mid conversation and know how the amounts discussed impact profit margins, etc.

So here’s a speed hack/trick to calculate the percentage of a figure. Let’s imagine that your costs have increased by 4%. You sell a widget for \$75 before the price rise. To maintain the same gross margin the sale price for the widget should be \$75 + 4%.

Calculating 4% of \$75 may sound tricky but it’s as simple swapping the dollar and percentage amount. We can rewrite the equation as 75% x \$4 or \$4 divided by 4 times 3 = \$3. The new price should be \$75 + \$3 = \$78.

Hopefully you haven’t fallen asleep!

Fringe Benefits Tax (FBT)

Many employers offer perks in addition to the standard wage package to attract the best staff.  What is seen as a ‘benefit’ can be fairly broad and often includes:

1. Car use
2. Car parking
3. Entertainment
4. Paying expenses on behalf of employees
5. Loans to staff
6. Housing/accommodation benefits

The FBT year ends on the 31st of March each year. FBT administration is often ignored as it’s an annoying chore but it’s far less of a chore to prepare a few elections at FBT year end to be compliant than to deal with Australian Tax Office FBT review if you are unlucky enough to be selected!

Single Touch Payroll (STP)

A reminder that Single Touch Payroll needs to be in place by 1 July 2019. STP reports payroll information to the government in real time so your payroll software needs to integrate into the STP system by 1 July. Please check to see if your payroll settings are ready to switch to STP or contact us if you’d like any assistance.

Below are a few of this months articles:

1. Supporting a grieving employee
2. FBT errors
3. Division 7A (loans from company to shareholder) changes