Christmas tips for small business owners

Managing Senior Accountant - Chesterton Accounting

The end of the calendar year is nearing and of course that means Christmas and the holidays are right around the corner! If you are an employer than now is the time to start considering staff parties, bonuses, gifts and most importantly – time off. Although an end of year bonus or physical gift might be the usual way to reward hard-working staff, many employees are considering their work life balance after the COVID-19 lockdowns. Employees are choosing flexibility and family time rather than a pay increase – so why not consider gifting staff with extra paid leave days to use at their discretion.

Monthly tax tip:

Staff bonuses are a lump sum payment provided to staff that are usually performance/target-based or are seasonal. All bonuses should be listed in payroll and taxed based on each employees tax obligations. If you instead provide a “cash” bonus to your staff then it cannot be claimed as a tax deduction. Another thing to consider is superannuation as certain bonus payments should accrue super such as performance based or a Christmas bonus. If the bonus relates to something that isn’t considered ordinary time earnings such as a bonus to reward the staff member for overtime provided then it wouldn’t accrue super. Please contact our office should you require assistance with payroll.

Managing Senior Accountant - Chesterton Accounting