Blog Layout

MyLeave: construction industry long service leave scheme.

Employees in the construction industry have access to a portable long service leave Scheme, funded by a compulsory levy on employers. Because the Scheme is “portable”, employees can take their long service leave benefits with them as they move from one workplace to another, accruing leave over the lifetime of their construction industry career. 


If you’re an employer with workers in the construction industry, you may be required by law to register in this Scheme, as established under the Construction Industry Portable Paid Long Service Leave Act 1985 (referred to as “the Act”). If you are required by law — defined by the Act — to register for the Scheme and do not, penalties apply. 


How do you know if you need to register for the Scheme? 


Ask yourself these key questions: 


  • Are you an employer or labour hire agency that employs workers in the construction industry? 
  • Do you employ workers under a contract of service or apprenticeship in a classification of work referred to in this list of industrial instruments? 
  • Do you employ individual subcontractors hired for labour, paid by the day or hour? 


If you answered “yes” to one or more, it’s important you know your obligations to contribute to the Construction Industry Long Service Leave Scheme. If you’re not sure whether you need to register for the Scheme, you can contact MyLeave who will advise you on the right option. 


Registering for the Scheme.


Employers must register with MyLeave and are required to pay long service leave contributions to MyLeave every three months. This levy covers the cost of administering the Scheme and the payment of long service leave to construction industry employees. 


Failure to register and pay contributions can result in fines and surcharges being applied to amounts owed. To register, complete and submit an Employer Registration Application with MyLeave. Once processed and accepted, you’ll receive a Registration Certificate confirming registration. 


 


What happens if you don’t register? 


As defined by the Act, registration is compulsory by law. Failure to do so and pay contributions can result in fines and surcharges being applied to amounts owed. 


How compulsory payments work. 


Once you’re in the Scheme, you’ll receive a Return every three months that covers the previous three-monthly period. The periods end in March, June, September and December each year. This Return must be completed and submitted with payment to MyLeave within 15 days after the end of each period. 


The form must include: 


  • The names of employees during the three-monthly period in the construction industry.
  • Details of days worked in the construction industry.
  • The amount paid as ordinary pay to employees. 


More on ordinary pay. 


This is where it gets tricky. The ordinary pay for reportable Service Days will vary depending on if the worker is entitled to paid leave or not… 


For workers entitled to paid leave, ordinary pay means the rate of pay to which the person is entitled for leave (other than long service leave) to which the person is entitled. Ordinary pay does not include annual leave loading but does include other amounts such as rental allowance, utility allowance, living away from home allowance etc, if these allowances are due to a worker when on paid leave. 


When a worker is not entitled to paid leave (other than long service leave), their ordinary pay is the rate of pay to which they’re entitled for ordinary hours of work. For example, the ordinary rate for casuals will include casual loading, other applicable allowances, and may include weekend work. 


If you’re not sure whether your employee is actually an employee or a contractor (as defined by MyLeave for MyLeave purposes), see these guidelines. 


Need help? 


If you're unsure whether you need to make payments to MyLeave for your workers, or if you need help setting it up and making payments, contact us.

Need help with your accounting?

Find Out What We Do

Six things to consider when starting a business

February 13, 2025
Thinking of starting a business? Here’s what you need to know! Read our latest blog to learn six key things to consider before starting your business.

Understand tax implications for tax donations

February 13, 2025
Donating to charity is a great way to give back, but did you know not all donations are tax-deductible? To claim a deduction, your donation must be made to a Deductible Gift Recipient (DGR), and can’t receive anything in return. Read our latest blog to learn what you can claim and how to maximise your tax return.

What is a Clearance Certificate? Why do you need one when selling property?

February 13, 2025
If you're selling property in Australia for $750,000 or more, you must obtain an ATO Clearance Certificate to prove you're an Australian tax resident — otherwise, 12.5% of your sale could be withheld!

Managed Funds vs ETFs: Which is right for you?

February 13, 2025
Thinking about investing but not sure whether to go with ETFs or managed funds? Both offer diversification, professional management, and access to a range of assets — but they work in different ways. Which one suits your investment strategy best? Learn more in our latest blog!

Tips to avoid tax on superannuation on death

January 14, 2025
You’ve likely heard the adage: "The only certainties in life are death and taxes." While death and probate taxes were abolished in Australia by the early 1980s, a potential "inheritance tax by disguise" could still be lurking in your superannuation or pension fund… The good news? With the right planning, this tax burden is avoidable .  At Ascent Accountants, we’re here to empower you with the knowledge and strategies to optimise your financial legacy. Here's what you need to know about managing taxes on your super and leaving more for your loved ones. Why your super might be taxed after you’re gone. Superannuation funds enjoy generous tax concessions while you’re alive: Accumulation phase: Earnings are taxed at just 15%, with a reduced 10% tax on capital gains. Pension phase: Balances up to $1.9 million are completely tax-free. However, a tax trap arises when super funds are passed to non-dependent beneficiaries (e.g., independent adult children). In such cases, a lump sum death benefit can attract a tax of 15% or 30%, plus a 2% Medicare levy. On the other hand, funds transferred between tax-dependent beneficiaries, such as between spouses, are not taxed. Understanding this distinction is key to effective estate planning. Strategies to minimise or eliminate super taxes. 1. Understand the taxable component. Only the taxable portion of your super balance is subject to this tax. By assessing the taxable versus tax-free components of your fund, you can calculate the potential tax liability for your beneficiaries. For young, healthy retirees with a long retirement horizon, the tax savings from super's concessional tax environment may outweigh the risks of tax on their death. However, older retirees or those with health concerns might find the potential tax liability for beneficiaries outweighs the benefits. 2. Withdraw funds from super. If you decide the risk of tax to your beneficiaries is too high, consider withdrawing funds from the super environment. These funds can then be invested in your name or another structure. Just remember that this is a complex decision requiring tailored advice to ensure your financial security while managing tax implications. 3. Implement a re-contribution strategy. A re-contribution strategy aims to increase the tax-free component of your super balance. You simply withdraw funds with a high taxable component, then re-contribute them as non-concessional contributions. While this approach can significantly reduce the tax liability , it must be executed carefully due to restrictions like contribution caps , work test requirements (for those over 74), and total super balance limits. In some cases, contributing to a spouse’s super fund can offer additional benefits, such as improving Centrelink eligibility. 4. Nominate your estate. Funds paid directly to non-dependent beneficiaries from super are subject to the Medicare levy. By nominating your estate as the beneficiary and having funds distributed via your will, this 2% levy can be avoided. However, directing benefits via your estate has its drawbacks. It’s vital to weigh this option against alternative strategies, especially if direct beneficiary payments better align with your financial goals. 5. Appoint a power of attorney. While your will is essential, an enduring power of attorney is equally important. This person can make financial decisions on your behalf if you become incapacitated, ensuring the best outcomes for your beneficiaries. Take the next step towards financial certainty. Want to ensure your beneficiaries receive the maximum benefit from your hard-earned wealth? We specialise in helping individuals and families navigate these complexities . From re-contribution strategies to estate nominations, we provide personalised guidance to protect your financial legacy. Reach out to Ascent Accountants . Together, we can develop a strategy to minimise taxes and maximise your legacy for the people who matter most .

Interest-only loans: when are they best for you?

January 14, 2025
In the world of home financing, an interest-only loan can be a strategic choice, particularly for investors. With the high cost of mortgages impacting household budgets, an interest-only loan may provide a temporary financial cushion. However, it's essential to evaluate your unique circumstances and understand the implications of this loan type before making a decision. What is an interest-only loan? An interest-only loan allows you to pay only the interest component of your loan for a specified period, typically ranging from three to ten years. This means you won’t be reducing the loan’s principal during this period, which results in lower monthly repayments compared to a standard principal-and-interest loan. Why choose interest-only loans for investment properties? One of the key advantages of an interest-only loan is its potential tax benefits for property investors . The interest component of a loan for a rental property is tax-deductible, whereas principal repayments are not. By opting for an interest-only loan, you’re only paying the portion that is tax-deductible, which can enhance the cash flow on your investment property. For investors, this structure provides an opportunity to claim higher tax deductions. This can be particularly beneficial when managing other expenses or reinvesting in additional properties. However, the benefit largely hinges on the property’s ability to generate income and increase in value over time. Key considerations. While interest-only loans offer flexibility and immediate cash flow benefits, they come with certain risks. It’s important to thoroughly understand these factors: End of interest-only period: When the interest-only period ends, the loan will convert to a principal-and-interest loan, leading to significantly higher monthly repayments. Borrowers must be prepared for this transition to avoid financial strain. No equity growth: Since you’re not paying off the principal during the interest-only period, the loan balance remains unchanged. This means you’re not building equity in your property unless its market value increases. In the event of a market downturn, you could face the risk of negative equity. Loan servicing requirements: Lenders require documentation such as tax returns, employment verification, and statements of assets and liabilities to assess your ability to service the loan. Carefully review your financial situation to ensure you can meet repayment obligations both now and in the future. Budgeting for the future: An interest-only loan is not a permanent solution. Use the reduced repayment period wisely to build a financial buffer. Saving during this time can help you prepare for higher repayments once the principal component is added. Final thoughts. Interest-only loans can be a valuable tool for investors , especially when managed strategically. By focusing on the tax-deductible interest component and leveraging the reduced repayment period, you can optimise your investment’s financial potential. However, it’s essential to plan for the future, anticipate higher repayments , and seek professional advice to mitigate risks. With careful planning, an interest-only loan could be the key to achieving your investment goals . The Importance of professional advice. Navigating the complexities of interest-only loans can be challenging . Consulting with financial professionals is critical to making informed decisions. We can help you understand how this loan aligns with your broader financial goals, ensure you’re not overextending yourself, and guide you in structuring your investments for long-term success. Contact us today to get started.
More Posts
Share by: