March 2019 Newsletter
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:
- Car use
- Car parking
- Paying expenses on behalf of employees
- Loans to staff
- 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!
Please contact our office if you’d like additional information.
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:
- Supporting a grieving employee
- FBT errors
- Division 7A (loans from company to shareholder) changes
- Ethics in business
- Cashflow management tips
- Single Touch Payroll
- Niche marketing