Weekly Digest – 24 March 2021
Welcome back to our Weekly Digest. Read on for the latest updates and some ideas to help us all move forward.
Vaccine Roll-out Slightly Behind Schedule
With more than 41,500 doses of the Pfizer-BioNTech vaccine administered to date and 95% of all border and Managed Isolation and Quarantine workers having received at least their first jab, NZ’s vaccine roll-out is slightly behind schedule.
However, the Director-General of Health Dr. Ashley Bloomfield said they’re ramping up every day with additional sites coming online across the country. A total of 1300 vaccinators have completed training and they expect nearly 50 vaccination clinics to be up and running by March 30.
PM Puts Quarantine-Free Travel With Australia On Hold
Prime Minister Jacinda Ardern announced earlier this week that quarantine-free travel with Australia will be on hold for two more weeks despite pressures from businesses to open the country’s border to Australia.
The government hopes to open up to Australians on the 6th April 2021, provided there is a proper system in place to prevent more lockdowns.
Free Online Digital Training and Support Tool
The Ministry of Business, Innovation and Enterprise, in partnership with The Mind Lab and Indigo, has launched a free training and support services to help businesses develop their digital capabilities.
More than 9100 small businesses are already taking advantage of these solutions through DigitalBoost.co.nz. This includes providing support on cybersecurity and fraud prevention.
Meanwhile, if you want more focused software integration advice, you may also get in touch with us so we can assist you in getting the right tech in place.
Employers: Minimum Wage Increases on April 1st
A quick heads up for employers: the minimum wage is increasing to $20/hour on 1 April.
To get ready for the change, we suggest you:
- Advise your team
- Check your payroll systems
- Update your budgets and forecasts
- Check your wage obligations.
The details of the increase are:
- Adult minimum wage will go up, from $18.90 to $20.00 per hour.
- Starting-out and training minimum wage will go up from $15.12 to $16.00 per hour.
- All rates are before tax and any lawful deductions for example PAYE tax, student loan repayment, child support.
You can find more information here but please contact us if you have any questions.
Beware of COVID-Related Scams
CERT NZ (Computer Emergency Response Team) is once again seeing an increase in COVID-related scams as the vaccine rollout ramps up.
The scams involve getting a phone call advising the vaccine is available for $49.99 and requesting people to enter credit card details. Another scam asks people to go to a website where they can ‘vote’ to be eligible for a jab.
In the previous week, there were also reports of an email scam claiming to offer money for taking a survey on the Pfizer vaccine.
Keep in mind that the vaccine is free for all Kiwis. So if you receive requests for payment or financial information, you may report it here or call 0800 2378 69.
Short-term Absence Payment
This is available for businesses, including self-employed people, to help pay employees who cannot work from home while they wait at home for a COVID-19 test result. This is a one-off payment of $350. You can find the details here.
Leave Support Scheme
The Leave Support Scheme is available for businesses, including self-employed people, to help pay their workers who can’t work from home and meet certain health criteria, eg they have COVID-19 or are a ‘close contact’ who has been told to self-isolate for 14 days.
The Leave Support Scheme is paid as a 2-week lump sum per eligible employee.
The Leave Support Scheme is paid at a flat rate of:
- $585.80 a week for full-time workers who were working 20 hours or more a week
- $350 a week for part-time workers who were working less than 20 hours a week.
Find out more about the Leave Support Scheme here.
Business Finance Guarantee Scheme Open Until June
Business Finance Guarantee loans can help small and medium businesses access credit for cashflow, capital assets and projects related to, responding to or recovering from the impacts of COVID-19.
All New Zealand registered banks and non-bank deposit takers (non-banks) are eligible to apply to join the scheme.
Depending on your circumstances, you may be able to access credit from either a participating bank or a non-bank, but not both.
If you borrow from a bank, it will determine the amount you can borrow and the length of the term up to a maximum of $5 million payable in five years. Meanwhile, if you borrow from a non-bank, the maximum amount is $3 million payable in five years. More information on eligibility criteria and how it works can be found here.
Applications for Business Finance Guarantee loans are open until 30 June 2021. If you need assistance or have any questions, don’t hesitate to drop us a message.
Small Business Cashflow Scheme Extended Until 2023
The Small Business Cashflow (loan) Scheme has been extended until 31 December 2023.
Organisations and small to medium businesses, including sole traders and the self-employed, may be eligible for a one-off loan with a term of 5 years if they have been adversely affected by COVID-19.
The maximum amount loaned is $10,000 plus $1,800 per full-time-equivalent employee. The annual interest rate will be 3% beginning from the date of the loan being provided. Interest will not be charged if the loan is fully paid back within 2 years.
You can find out more here, or simply get in touch with us so we can provide our professional assistance.
Kiwi Business Boost Tool
The Government has funded specialist consultancy support services to provide advice to businesses who need it. You can use the Kiwi Business Boost Tool to find out what services are available in your region.
The Treasury website’s COVID-19 Economic Response Measures can also provide more information on the range of supports available to businesses.
Understanding Contribution Margin and Why You Need It
When you run a business, you obviously need to know how profitable it is. You can check your profit margin to understand by how much your revenue exceeds costs.
However, if you’d like to dig deeper and learn how a certain product contributes to your profit, you have to look at the contribution margin.
When you create a product or deliver a service and deduct the variable cost of offering it, the leftover revenue becomes the contribution margin.
So simply put,
Contribution margin= revenue – variable costs
By knowing the contribution margins, you can decide whether to add or subtract a product line, how to price it, and how to structure sales commissions.
If a product’s contribution margin is negative, it means your company is losing money producing it. Your course of action could be to discontinue the product or increase its price. Meanwhile, if a product has a positive contribution margin, you would want to keep it.
However, the first step in calculating for the contribution margin is to use your income statement and identify all your fixed and variable costs. This is not as straightforward as it sounds because it’s not always clear which ones fall into each category.
So if you want to save time and ensure that you get the contribution margins right, get in touch with us so we can help you make informed business decisions.
Get in touch
Contact us if you have any questions or want to discuss the next steps for your business.