logo
spacer
spacer

 eWombat Search 
>
spacer spacer spacer
Latest Accounting News
Hot Issues
ATO issues warning after ‘unprecedented’ spike in impersonation scams
Crypto transactions in ATO sights with new data-matching program
Government to establish $2 billion fund for small business lending
Small business corporate tax rates Bill is now law
ATO to double rental deduction audits to 4,500
ATO set to issue excess super contribution determinations
How's Australia going as we approach the election?
Single Touch Payroll (STP) is compulsory for all small businesses.
Federal Budget 2019 - Overview
How the 2019 Federal Budget affects you
FBT Reminder – Odometer Reading
‘Big awareness push’ underway as STP deadline approaches
GST collection on overseas goods at 300% of forecasts
The problem with getting to 53 years of age.
Lost Beneficiaries
New quarterly STP reporting method for closely held payees revealed
Some Australian figures to help on Budget night.
Employers hit with rolling SG audits as ATO toughens stance
Resources to help understand and implement Single Touch Payroll (STP)
Big fines, prison on the cards as new SG penalties introduced
Extra website resources and tools is one way we offer you and your family more.
FBT Exemption for Various Work Vehicles
Tax payable on expenditure recoupments
ATO identifies SMSF contravention red flags
Who wins dispute about taxable income?
Australia - facts & figures March 2019
Strategies to handle scam phone calls and problem e-mails.
Instant asset write-off threshold upped to $25k
Jail time for GST fraud
Articles archive
Quarter 1 January - March 2019
Quarter 4 October - December 2018
Quarter 3 July - September 2018
Quarter 2 April - June 2018
Quarter 1 January - March 2018
Quarter 4 October - December 2017
Quarter 3 July - September 2017
Quarter 2 April - June 2017
Quarter 1 January - March 2017
Quarter 4 October - December 2016
Quarter 3 July - September 2016
Quarter 2 April - June 2016
Quarter 1 January - March 2016
Quarter 4 October - December 2015
Quarter 3 July - September 2015
Quarter 2 April - June 2015
Quarter 1 January - March 2015
Quarter 4 October - December 2014
Quarter 4 of 2015
Articles
FBT – Christmas Parties and Taxi Fares
Merry Christmas for 2015 and Happy New Year.
Common errors in claiming deductions for super contributions
Employee Christmas Parties and Gifts – Any FBT?
Collectables Require Action Now
Why the ATO’s new powers make SMSF compliance more important than ever
Self Managed Superannuation Funds – Is it for Retirement?
ATO warns against misusing partnerships
The Scammers Shame
ATO offers SMSF 'unwinding' for aggressive tax arrangements
Salary and Wages PAYG Shortfall
SuperStream
Australian Taxation Office (ATO) Telephone Scammers – BEWARE!
Navigating the BDBN minefield
SMSFs warned on emerging LRBA issue
Short Access to Term Deposits
Retirees taking super in lump sum is a ‘myth'
Salary and Wages PAYG Shortfall

Many taxpayers will owe tax in July 2016, instead of receive a refund.



       

It is likely this financial year that there will be an extra pay period.


  • fortnightly – will have 27 pay days for the year instead of the usual 26
  • weekly – will have 53 pay days for the year instead of the usual 52

The withholding tax tables calculated by the Australian Taxation Office are based on the normal number of pays in a year.  Tax rates increase as a taxable income increase.  Therefore, the additional pay day will mean that amounts withheld from salary or wage payments made to many payees will not cover the amount payable when they lodge their tax returns.


What can be done?


The Australian Taxation Office recommends that additional amounts can be withheld.


Every taxpayer’s circumstances are different, but those who normally expect to receive a small refund at the end of the year are likely to find that they owe tax, because of the additional pay day.  Any payees concerned about the possible shortfall in amounts withheld, can request additional amounts.  The recommendations are:-


Weekly earnings

Additional withholding per pay

$725 to $1,524

$3

$1,525 to $3,449

$4

$3,450 and over

$10


 


 


Fortnightly  earnings

Additional withholding per pay

$1,400 to $3,049

$12

$3,050 to $6,799

$17

$6,800 and over

$42


 


An email request to the pay office should be enough.  But don’t wait too long!


If you think this difference would be insignificant, then think again!  An average taxpayer earning $3,200 per fortnight will be $482 out of pocket, when they lodge their 2016 income tax return.


For a normal, 26 fortnight year, the taxpayer would receive a refund of $41 on assessment of their tax return.  In a 27 fortnight year, they would face a bill of $421, which would be the tax payable on assessment.


This example uses 2015-16 tax rates.  It assumes the payee has no other income or deductions and is not entitled to leave loading.


Speak to the pay office immediately!


 


Source:  Written for AcctWeb by a Melbourne accounting practice




22nd-November-2015