30 Sep What do the new tax tables mean for you from 1 October?
The Australian Tax Office has released new tax tables, and whether you pay or receive regular wages, you need to understand the details.
The ATO’s new tax tables will take effect this week and We All Count Partner Shaun Williams has a few key tips to ensure you are confident and ready for these changes.
It’s been a turbulent few months since the Australian Government announced its budget back in May, with many of the final details only being introduced to parliament late last month.
The most notable of them is when the 37% marginal tax rate kicks in for individuals, with the tax threshold proposed to increase from $80,000 to $87,000.
These new tax tables, importantly, don’t take into account any taxes withheld prior to 1 October 2016, which means individuals affected by the change will be entitled to a bit more of a tax refund than they otherwise would have when coming to complete their 2017 income tax returns (by being credited any extra tax paid between 1 July and 1 October 2016.).
So there is some good news here!
What do the new tax tables mean for business owners?
From a practical perspective, that depends on your personal circumstances and how you pay employee wages. Here are the top three scenarios and our tips on how to deal with these:
1. You use XERO
2. You use MYOB, Reckon …
If you are using any other accounting software packages, (ie. MYOB or Reckon), you will need to contact your software provider to confirm if the update will be automatic or not. If the update is not automatic, you will need to manually download the new tax table and install it prior to processing any employee pays after Sunday, 1 October 2016.
3. You process wages manually
The easiest way to ensure you are not withholding unnecessary tax from your employee is to visit www.ato.gov.au/Rates/Tax-tables/ and use the tax withheld calculator provided in reference to the tax tables applicable to your business and employees.
Managing the changes from the ATO and ensuring your business complies with tax law is essential to good business management. If you have any queries on this, or need further information, contact us at We All Count on (08) 8531 0577 or firstname.lastname@example.org.
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Partner – Murray Bridge