Have Employees? Do You Know About The New Tax Rates from 1 October 2016?
If you have employees or are on payroll yourself, it’s important to know there will be a change to the PAYG tax rates effective from 1 October 2016.
These changes were announced in the May 2016 budget but, due to the election, the legislation was delayed.
The marginal tax rate of 37% will start at $87,000 instead of $80,000. This means that anyone earning over $80,000 will receive a tax reduction.
There will not be any catch-up component for wages processed from the start of the financial year to 30 September 2016 so you do not need to include any adjustments for payroll already processed. Any extra tax paid will be credited back when you lodge your 2016-2017 income tax return.
Some accounting software like Xero and MYOB Essentials will automatically apply changes so you can continue to run payroll from 1 October 2016 as usual, however, you may need to manually upload tax tables for other accounting software or use the tables from the ATO website (please find link below).