Hejaz Financial Services is launching 3 new Islamic funds with first fully-fledged Islamic bank in 12 months.
Our COO, Muzzammil Dhedhy, spoke to Nessereen Tamano from Islamic Finance News on the current status of Islamic finance and banking in Australia.
Listen to the podcast here.
Or learn more about Hejaz’s range of premier Islamic Financial Services here.
With unemployment rates decreasing, housing prices rising and the share market performing strongly, the last quarter has been very positive for the economy and investors alike. In this article, we summarise the key standouts from the April to June 2021 quarter.
JobKeeper was a cornerstone of Australia’s response to the coronavirus pandemic. It provided millions of Australians with an ongoing income and kept thousands of businesses afloat, so when it came to an end in March expectations were that there would be a sharp spike in unemployment. One estimate was that 150,000 workers would lose their jobs.
Happily, that wasn’t what happened. From March to April the unemployment rate dropped from 5.7% to 5.5%, then fell to just 5.1% in May. That’s below the 5.2% that applied in January 2020 before the pandemic hit, and an amazing outcome given the damage that COVID-19 continues to inflict on a virus-weary world.
Aspiring homeowners and upsizers endured another quarter of woe as home prices continued to soar. Nationally, dwelling prices were up 6.1% for the quarter and 13.5% for the year, with houses outperforming units. Of course, on the other side of the equation are homeowners, many of whom are delighted by the significant boost to their wealth.
Continuing low interest rates remain the key driver, but other issues have played a part, including stamp duty discounts and households redirecting the cash they would otherwise have spent on overseas holidays. Lockdowns last year also affected the normal supply of property leading to pent-up demand. As subsidies are rolled back, supply and demand normalise and if population growth remains low, property price growth may well come back to ‘normal’ levels.
And despite the RBA not expecting to raise interest rates until at least 2024, some economists are pointing to the low unemployment figures to predict that interest rates may begin to rise by the end of 2022. There is also growing speculation that the RBA and APRA will lift lending standards (e.g. requiring lower loan to valuation ratios) in order to rein in galloping price growth.
Global markets performed strongly over the quarter with many setting record highs. Locally the S&P/ASX200 rose 7.7%, beating the MSCI All-Country World Equity Index, which was up 6.9%. Tech shares were back in the lead with NASDAQ gaining 11.2%, while the S&P500 rose steadily to gain 8.6%.
The Aussie dollar fell slightly against the major currencies weakening late in the quarter following talk that the next move in US interest rates may be up.
Iron ore continued to astound, up 30% for the quarter to US$215.50 per tonne.
If you are interested in Islamic Superannuation, Islamic Investments or Islamic Home Finance, learn more about them here.
Superannuation guarantee (SG) rates will increase from 1 July 2021. While this is good news for our retirement nest eggs, some employees may feel the impact with a deduction to their take-home pay. This article explains the SG rate changes, salary differences, and options available to those who are affected by a deduction to their wage.
The superannuation guarantee (SG) is the minimum percentage of ordinary earnings that employers must contribute to superannuation for their eligible employees.
After years being stuck at 9.5% the Superannuation Guarantee (SG) rate is on the move again. It increased from 9.5% to 10% on 1 July 2021, and will increase by a further 0.5% each year until it reaches 12% from July 2025.
More money into super to provide a more secure retirement? What’s not to like about that? Well, it depends on your employment contract as to whether you are in for a welcome bonus or a nasty surprise when each annual increase in the SG kicks in.
If you are paid a base rate plus super then your employer should increase your super contributions by 0.5% with no change to your take-home pay. This is the likely to be the most common (and the best) outcome. It’s possible some employers may take the increases in SG into account when negotiating future wage increases, but this is an indirect and by no means certain outcome.
It’s a different story if you are paid on the basis of a total package, including super. In this case, and provided it doesn’t drop your pay rate below award minimums or the minimum wage, your employer may deduct the additional SG from your take-home pay. Not such a desirable outcome.
Just because an employer can reduce take-home pay to make up for the higher SG doesn’t mean they will. Many employers will wear the cost, and if that’s the case with your employer, all well and good. Also bear in mind that employers may use both types of contract, so just because your colleague at the next desk is paid on a salary plus super arrangement, you may not be.
With the outcome entirely up to your employer it’s important to talk to them. Find out if you are affected, what they plan to do, and if necessary see if you can negotiate an appropriate increase to your total package. If you have union representation this may be helpful.
It will all come down to the strength of your bargaining position. Employers who want to keep good employees and avoid the cost of employee turnover may be more willing to carry the cost of the increase. It’s also possible for your employer to take one approach this year and another next year, depending on business conditions.
While the drop in take-home pay after the initial SG increase may be relatively small, by 2025 it will be a much greater amount. It’s important to have that conversation with your employer as soon as possible.
Learn more about the SG rate increase here.
At Hejaz Financial Services, our Islamic Superannuation has a range of investment options designed to help you achieve your long term goals. We are also known to have outstanding performances and we keep our costs low to pass on your Superannuation returns to you.
If you wish to speak to one of our qualified wealth advisers, you can schedule an appointment or give us a call at 1300 043 529. To find out more about Australia’s Best Performing Islamic Super Option FY19/20* you can visit our website.
We are also Australia’s First and Only Islamic Pension Option, you can count on us to help you retire Islamically.
Our CEO, Hakan Ozyon, explores the current dilemma facing the adviser industry, reverting back to past mistakes or building a client-centric model.
Hakan also shares his thoughts on Islamic finance in Australia, the under-banked community and how advisers can not only survive but thrive in this market.
Read the article here.
Or learn more about our range of premier Islamic financial services designed specially for you here.
As tax time nears, here are some things to think about to get the most out of this EOFY.
The end of another financial year is looming, and with that may come thoughts about your tax return and how your wealth has tracked throughout the year.
Whether you’re nearing retirement, a high-income earner looking to reduce your taxable income, or you’re on a lower income and looking for ways to maximise your super contributions; there are a few things you can consider at tax time. Read this article to finish this financial year on the right foot.
If you’re nearing retirement, putting as much money into your superannuation account now is a good way to make sure you build up a healthy nest egg to live off in your golden years. To maximise your super contributions, consider salary sacrificing to put more money into your super account.
Salary sacrificed super payments take money out of your pre-tax income. These are called concessional contributions and are taxed at 15%. This rate is lower than most taxpayers’ marginal tax rates, so it can be an excellent way to reduce your taxable income while increasing your superannuation savings.
The maximum employer and salary sacrificed contributions that can be made each financial year is $25,000. And remember, if you’re self-employed, your concessional contributions are a tax deduction.
Non-concessional contributions of up to $100,000 can also be made each financial year. These contributions come from your after-tax income.
Let’s say you’re on an income of $170,000. If you haven’t opted to salary sacrifice, your employer contributions to super will be $14,748.86 in the financial year. Therefore, your taxable income will be $155,251.14.
To lower your taxable income, you could make a one-off concessional contribution of $10,000. This will reduce your taxable income and still come in under the concessional contribution cap of $25,000.
If you earn less than $54,837 per year (20/21 financial year) before tax, you could be eligible for the Government’s co-contribution on after-tax super contributions.
Those who earn under the threshold can make an after-tax contribution, and the Government will calculate your co-contribution amount when you submit your tax return. The co-contribution will be deposited directly to your superannuation account.
Taking advantage of Government co-contributions can be a great way to boost your superannuation savings, either for retirement or to save towards buying your first home.
It just wouldn’t be tax time without the fun of sorting through your receipts and documents. If you stay organised throughout the year, however, it doesn’t need to be a headache.
Now is the time to check you’ve been keeping good records. Have you got a record of relevant receipts and policy statements for items such as income protection policies you have outside superannuation?
Understanding the paperwork you require now to maximise your deductions will save you time when it comes to completing your tax return. If you haven’t got all of your records organised, review your spending throughout the year, identify transactions that may be a tax deduction, and put aside those receipts for tax time.
If you’re looking to maximise your tax return and get ready for a successful financial year ahead, talk to a financial adviser about your options.
It doesn’t matter your circumstances; there are options available to help you boost your super savings and get the best tax return possible.
At Hejaz Financial Services, we have an expert team that comprises of Tax Financial Advisers, Tax Agents and Accountants. We can therefore advise and assist on matters relating to Tax Minimisation, Tax Strategy, and Investment Structuring. Learn more about our tax services here.
Our CEO, Hakan Ozyon, shares his thoughts on making the financial advice industry sustainable. There will always be a need for sound financial advice.
The question is how can the sector adapt to strike the right balance between quality and affordability?
Read the article: https://www.fsadvice.com.au/blogs/view/making-the-financial-advice-industry-sustainable-179774097?q=hejaz
Learn more about our range of premier Islamic financial services: https://www.hejazfs.com.au/
This budget recap summarises major government announcements from the 2021 Federal Budget including retirement savings proposals, business support programs, new home owner initiatives and aged care announcements.
Greater flexibility for older Australians to boost superannuation, continued support for small business, and extra help for struggling homebuyers are key drivers in the Federal Government’s 2021 Budget, designed to steer Australia away from a pandemic recession.
Australians aged 67 to 74 will no longer need to satisfy the ‘work test’ requirements in order to make super contributions, while the age requirement on “downsizer” contributions, which allows top-ups of up to $300,000 per person, will drop from 65 to 60.
While these changes will not come into effect until 1 July 2022, they will allow many older Australians to make significant super contributions and effectively restructure their financial affairs, even after they have retired and left the workforce.
Approximately 300,000 working Australians, mostly women, earning $450 or less a month from a single employer will now receive full super guarantee contribution entitlements, providing a significant boost to their retirement savings.
The Government will further accelerate economic growth by extending three of its most successful small business support programs.
Temporary full expensing will continue until 30 June 2023. Small business owners can claim the full cost of buying a car or piece of equipment as an immediate tax deduction.
Temporary loss carry-back provisions will now include the 2023 financial year. Businesses can claim a tax refund with ‘carry-back’ losses from one trading period used to offset a profit from a previous trading period.
The Job Trainer program will also continue with the Government providing a 50 per cent wage subsidiary for another 270,000 new apprentices and trainees hired by Australian businesses, as well as a raft of other employment boosting initiatives.
Those struggling to take their first step on the property ladder will benefit from the Federal Government’s decision to allow first home buyers to access $50,000, up from $30,000, from their superannuation savings to contribute to their deposit.
Some 10,000 Australians will be able to buy a new home with just a five per cent deposit under the New Home Guarantee, while a further 10,000 single parent families will be able to buy a home with just a two per cent deposit under the Family Home Guarantee.
Other initiatives include:
• $353.9 million for a range of initiatives supporting women’s health.
• An extra 80,000 in-home aged care packages over the next two years.
• $7.8 billion to aged care providers over the next five years.
• $1.7 billion for childcare effective from 1 July 2022. This will include the removal of the subsidy cap for high-income earners and increased subsidies for families with two or more children under five years.
• The extension of the temporary low- and middle-income earners tax offset, where those earning less than $126,000 will receive a $1,080 tax offset until 2022.
Many of these announcements will not come into effect for some time, so to find out how and when you can benefit, be sure to seek specialist advice from your accountant or financial adviser.
Source: https://budget.gov.au/
Want to learn more about our Premier Islamic Financial Products? Click here.
Our mission has always been to help the Australian Muslims gain better access to wealth creation in line with their faith and values.
With a banking license, this would open up more opportunities for the community to access a holistic range of financial products and services without compromising on quality and performance.
Thank you Aleks Vickovich and The Australian Financial Review for the chat and write up.
Read the article: https://www.afr.com/companies/financial-services/wealth-firm-eyes-250b-islamic-finance-market-gap-20210514-p57s3a
Learn more about Hejaz Financial Services Islamic products: https://www.hejazfs.com.au/
Working from home? Here is how to boost your next tax return.
With the range of technology and software available today, it’s become easier than ever to work from home. If you’ve been working from home, you’ve likely set up a dedicated work area, and you’re using your own electricity and resources to power your workday. In this article, we take a look at the deductions available to you and how to boost your next tax return.
With the range of technology and software available today, it’s become easier than ever to work from home. Employees can efficiently complete calls using teleconferencing software, many collaboration tools are now cloud-based, and work devices, including laptops and tablets, are light and portable.
If you’ve been working from home, you’ve likely also set up a dedicated work area, and you’re using your own electricity and resources to power your workday. But which of these items can you claim in your next tax return to ensure you maximise your return?
Working remotely has become more common as companies began providing the technology to enable employees to work from anywhere. Research from Roy Morgan found that in early-2020, at the height of the COVID-19 pandemic shut down, 32 per cent of Australian workers were working from home. This equates to over 4.3 million people.
It’s easier for employees in certain industries to work from home, such as finance and insurance, public administration and defence, and communications. In contrast, more “hands-on” industries such as retail, manufacturing, transport and storage and agriculture still require staff to be present in-store.
Home office expenses you may be able to claim include:
• electricity;
• cleaning costs for your dedicated work area;
• phone and internet expenses;
• computer consumables – such as printer paper and ink cartridges;
• stationery; and
• home office equipment – including computers, printers, phones, furniture, and furnishings.
The Australian Taxation Office (ATO) provides a complete list of the available deductions and how to calculate each on its website.
There are three methods employees can use to calculate their home office expenses:
• Shortcut method: 80 cents per work hour – only available from 1 March 2020 to 30 June 2021
• Fixed-rate method: 52 cents per work hour
• Actual cost method
If you include home office expenses in your next tax return, ensure you calculate and apply your deductions correctly. For example, you can claim the full cost of home office equipment up to $300, but you need to claim the decline in value (depreciation) for any items that cost over $300.
Regardless of the method you use to calculate your expenses, you will need to have records. You’ll need to keep receipts for any purchases you’ve made and a record of relevant utilities and bills. You’ll also need to keep a timesheet, roster or diary that shows the hours you’ve worked from home.
If you can, keep your relevant records and receipts aside and updated throughout the year to save yourself a significant administrative workload at tax time.
With the range of deductions that may be available to you, plus the different calculation methods for home office expenses, having a registered tax professional prepare your tax return can be worth the investment. Quite often, your maximised refund will cover more than the cost of having a professional prepare your return.
If you’re unsure about the home office deductions you’re entitled to, contact an accountant or qualified financial professional for advice.
These are just a few ways to manage how your money is taxed. Depending on your circumstances, other options may be available. Your licensed adviser can work with you to help you achieve what is best for you this financial year. But please don’t leave it too late, get in before the crowd and get your refunds early.
At Hejaz Financial Services, we have an expert team that comprises of Tax Financial Advisers, Tax Agents and Accountants. We can therefore advise and assist on matters relating to Tax Minimisation, Tax Strategy, and Investment Structuring. Learn more about our tax services here.