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Why company culture is important

By November 25, 2020 Business

Company culture has become an important part of how businesses are perceived. Businesses with a positive culture are more likely to attract clients and customers. Statistics also show that over 50% of executives believe that having a good culture can influence productivity, creativity, profitability, firm value and growth rates. 

However, while it can be easier to describe and quantify a company’s products and services, defining culture is a lot more difficult. It requires capturing the company environment, values and relationships. 

Identifying what your company culture is, or what you want it to be, will determine your work processes, hire new people into your team, and how you and your employees interact with clients. 

The first thing to do is to identify key traits that describe your culture. Bring together a diverse group of people from across your company and brainstorm words and qualities which describe the culture. Collate the words which you hear the most so that you end up with a list which is representative of the culture that employees most relate to. 

The next thing you need to do is distil this list down to the core values you can see in it. You can conduct surveys (if you have a large company) or talk to your employees (if the company is small) and ask them whether the values you have chosen resonate with them, and if not, which ones do. At this point, you should aim to have around 5 values, but this is a flexible number. 

Last of all, once the core values have been established, share them throughout the company. Employees should relate to these values and they should also feel motivated to embody them. Communicate with your employees about why these values may or may not be working/suitable. 

Remember that this is a process. You may not get it right the first time, which is why it is important to be receptive to feedback from all members of the company. 

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Transition to retirement

By November 25, 2020 Super

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work. 

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time. 

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer’s compulsory contributions as well as any voluntary contributions you may be making. 
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer. 
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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Tax contributions on your super

By November 25, 2020 Tax

How much tax you pay on your super contributions and withdrawals depends on a variety of factors. The process takes into account your total super amount, your age, and the type of contribution or withdrawal you make. 

How are super contributions taxed?

The money that you contribute to your super account through your employer is taxed at 15%, and this is the same with salary sacrificed contributions. But there are exceptions to this:

  • If you earn $37,000 or less, then the tax will be paid back to the super account due to the low-income super tax offset (LISTO)
  • If your income and super contributions add up to more than $250,000, then you are also required to pay an additional 15% Division 293 tax. 

Any after-tax super contributions (non-concessional contributions) are not taxed further.

How are super withdrawals taxed?

How much tax you pay on withdrawals depends on whether you withdraw as a super income stream or a lump sum. Since this can be a convoluted process, it may be beneficial to approach an advisor and clarify any questions you may have before you withdraw money. 

What about beneficiaries?

If someone dies, then their super money will go to their beneficiary. This is known as a super death benefit. As a beneficiary, the tax you pay on the death benefit is dependent upon:

  • The tax-free and taxable components of the super
  • Whether you’re a dependant for tax purposes
  • Whether you take the benefit as an income stream or a lump sum. 

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What to know before you apply for a business loan

By November 19, 2020 Business

A business loan can give you the support you need to fund growth or temporarily relieve cash flow pressures. These are some things to know before applying for the loan:

  • Understand the purpose of your loan: You should be sure about why you want a loan and what you will be doing with the loan. 
  • What loan amount do you need: Realistically calculate how much money you need and how you’ll be allocating it to your needs
  • What can you afford to pay: Consider the length of the loan, payment options and other details before you apply. Think about what you can afford to pay so that you can discuss which of these features can and cannot be adjusted to suit your needs. 
  • Secured or unsecured loans: A secured loan means that you provide an asset for the loan, your interest will be lower than for an unsecured loan and the lender may be able to sell your asset if you are unable to pay the loan. An unsecured loan means that you don’t provide an asset so that the interest rate is higher. It may be difficult to get approved for an unsecured loan. 
  • Fixed or variable interest: If you are confident that you can meet the repayment requirements even if the rate increases but a fixed rate makes it easier to manage your cash flow as all your repayments are the same. 
  • Fees and charges: The true cost of any loan is only apparent when you take into account all the additional payments that are incurred. These could include early repayment fees, exit fees, valuation fees (to secure your loan), etc.
  • Paperwork: Planning your paperwork ahead of time will make it easier for the lender to approve your loan, this will also make the entire process faster.
  • Consider speaking to an expert: You may want to discuss with an advisor about whether a loan might be the best option for you and what alternatives are available if any. 

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