Following an announcement in July, the Australian Government recently increased the 32.5 per cent tax threshold from $37,001 – $80,000 to $37,001 – $87,000.
The new PAYG withholding rates will apply to individual taxpayers who earn more than $80,000 from 1 October 2016.
The Australian Tax Office provides a range of tables to assist employers work out how much to withhold from payments they make to their employees. Since the latest edition of the new tax tables is now available, employers should use these new tax tables for payments made from 1 October 2016.
The Tax Office also provides a tax withheld calculator employers can use to calculate the correct amount of tax to withhold. The tax withheld calculator applies to payments made in the 2016-7 income year and provides the correct rates for the 2016–17 income year.
Updated tax tables do not include any catch-up component for the portion of the year which has already passed. Individuals who are affected will receive the full benefit of the tax changes upon an assessment of their income tax return for the 2016-17 income year.
Employers do not need to make any other adjustments or refunds as the ATO will refund any over-payment of tax when employees lodge their 2016-17 income tax return.
Interested to learn more?
If you’re interested to learn more about the new PAYG withholding rates or for specific advice tailored to your business situation; Get in touch with a business tax accountant from Taggart & Partners on (07) 3391 1188 or email us at firstname.lastname@example.org for the most recent updates on PAYG today.