Level 4, 20 Grenfell Street,
Adelaide SA  5000

Phone: 08 8231 1888
Fax: 08 8231 3888

Email: admin@crase.com.au





 
Latest News
Hot Issues
Tax Time Checklists- Individual, Company, Trust, Partnership and Super Funds
SMSFs - Our 'hardest' jobs
Tax Office reveals adventurous, dubious claims ahead of tax time
ATO reveals top tax time mistakes, set to contact 1 million taxpayers
Watch out for charges with incoming GST laws.
Super savings gap for women stuck at 30%
‘Wipe the slate clean’: Clients, accountants urged to use new amnesty period
Statistics for all Australians
Touch Payroll (STP)
‘Calm before the storm’: Government proposes 12-month SG amnesty
Government intensifies cash payments crackdown - Kelly O'Dwyer
Passive investment companies tax rate still 30%
Cryptocurrency audits tipped to increase this EOFY
Australia by numbers – Update
$2.4m lost to tax scams, ACCC reports
No GST on digital currency
Federal Budget 2018 - Overview
Your Budget
4 components of our 2018 Federal Budget
Resources to help understand and implement Single Touch Payroll (STP)
New rules capture SMSFs trading big with cryptocurrency
New passive income test for lower corporate tax rate
Tools to help you manage your financial position are available on our site.
‘A simple mistake can attract our attention’: ATO reminder about FBT slips-ups
Australia by numbers – Update
Beware residency rules if moving overseas
Meaningful tax reform in high demand
Working holidaymakers and tax returns
Articles archive
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 2 of 2016
Articles
Reminder – Salary and Wages PAYG Shortfall
$20,000 Asset Write Off Reminder
Danger for buyers of Australian property of $2 million plus
Budget 2016-17
FBT Time
Fringe Benefits Tax – Company Holiday Home
Fringe Benefits Tax – Nil
Estate Planning - early inheritance
ATO issues SMSF tax warning
ATO seeks to dispel LRBA panic
Financial tools your family and friends can use.
$20,000 Asset Write Off Reminder
Tax office issues warning on imminent rule change
Age Pension means-test prevents rational decision-making
Locking Up Bank Accounts
ATO figures show property investors missing out on tax breaks
Reminder – Salary and Wages PAYG Shortfall

 

Our article Salary and Wages PAYG Shortfall earlier in the year, highlighted the probability that many taxpayers would not receive a tax refund for 2016.


The article is added again below and should be re-read so you can change the next pays if you are affected.


----------------------------------------------------------------------------    



       


       


 


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




21st-June-2016
      Site By AcctWeb