Managing people is a key part of any small business – but it can be one of the most difficult aspects of the job. We put your questions to our experts!

How can I raise my prices without it p*ssing people off?

Jasmine Parasram, Pricing Coach at Jasmine Designs, says:

If you aim to avoid p*ssing people off, your prices will never go up. Ultimately, you’re a business, and to grow as a business, you need to price yourself out of the market that can’t afford you. You don’t owe affordability.If you have repeat customers, giving them a one to three-month heads up that prices are going up is a great way to increase your prices while maintaining the relationship. This small act of courtesy may be the thing that sets you apart and keeps that client long-term. Communicate with them so they are well informed and aren’t shocked when it happens.

On the other hand, if most of your jobs are one-offs and most of your customers are new each time they work with you, they likely don’t know what the price was before you raised it, so you don’t have to worry about them comparing. If they did see the price before but now it’s more, that’s not on you, but a good practice is having a note stating quotes are valid for 30 days on your estimates. Prices today aren’t promised tomorrow.

Lastly, be mindful of the frequency and amount you increase your prices. Yearly is expected in most businesses, or increasing when your business changes in terms of scale or service level. A 5-10% raise is something that most customers can stomach, a 20-30% without a justifiable reason that benefits them will most likely make the customer think twice or go elsewhere. Remember, your prices need to serve the future and growth of your business first before they serve the customers’ budget.

Should I give my staff a Christmas bonus? If so, what’s the most tax-efficient way to do it?

Tony Dimitriadis, Director at AD Partners, says:

Giving your staff a Christmas bonus is a nice way to say thank you and will likely boost morale and staff retention whilst also encouraging increased productivity and commitment.
What’s the most tax-efficient way to do it?

Cash bonuses

Cash is the easiest option, but there’s a catch. Cash bonuses are treated as regular wages, which means they’ll be taxed like normal salaries. This means PAYG withholding, superannuation, and even payroll tax apply. A $500 bonus might not feel like $500 in their pocket.

Non-cash bonuses

Non-cash bonuses can be more tax-efficient, especially if you keep them under $300. Gift Cards: If you give a gift card valued at $300 or less, it’s likely to be exempt from Fringe Benefits Tax (FBT). That’s because it qualifies as a minor benefit.

Christmas Parties: If it costs less than $300 per employee, it may also be exempt from FBT under the same minor benefits rule—especially if you host it on your business premises.

Superannuation contributions

Instead of a cash bonus, you could contribute to your employees’ superannuation. Contributions within the concessional cap (currently $30,000 per year) are taxed at just 15%.

Salary sacrifice

Offering salary sacrifice means they can redirect their bonus into their superannuation, which will also be taxed at the concessional 15% rate. Alternatively, you could salary sacrifice tech or tools for an immediate benefit.

In summary

For small bonuses, non-cash options like gift cards can help you avoid FBT. For larger bonuses, offering superannuation contributions or salary sacrifice can give your employees a tax-effective option. Giving your team a Christmas bonus can be a win/win outcome, if you do it in a tax-smart way!

* Please remember, this advice does not take into account your personal or business circumstances, is general in nature, and is provided for information purposes only. Please seek professional financial advice that’s tailored to your circumstances if you need it.