Tax Cuts – Change to withholding amounts for employees have been announced by the Australian Government. Personal income tax cuts introduced to apply from 1 July 2020.
Updated tax tables are now available for you to reflect the tax cuts in employee’s take-home pay.
You must make sure you are withholding the correct amount from salary or wages paid to your employees for pay runs processed in your system from 16 November onwards.
Payroll software providers will be updating software to implement these tax rate changes. Some payroll software providers may take longer to update their software. Your software provider will keep you updated on these changes.
You don’t need to make any other adjustments or refunds.
Any ‘over-withholding’ that occurred prior to updating your payroll software or processes will be included in your employee’s income tax assessment at the end of the year.
Changes to personal income tax thresholds announced by the Government during the Federal Budget have been incorporated into the withholding schedules and tax tables and will apply to payments made on and from 13 October 2020.
As the changes to withholding are made part way through the income year, employers and other payers who are unable to immediately implement these changes into their payroll will have until 16 November 2020 to do so.
Employees and other payees will receive their entitlement to the reduced tax payable for the entire 2020–21 income year when they lodge their income tax return.
To view and download the updated tax tables that suit your pay cycles, please click here
Our team at Gerard Wilkes & Associates are here to help. If you have any questions regarding this Tax Cuts – Change to withholding amounts article, or would like to discuss your taxation matters further, please contact us at https://www.wilkes.com.au/contact-us/ or call our office 07 5532 1733.