Federal Budget benefit: How to give your employees a cash boost now.
The federal budget announced they would bring forward the reduction in the individual tax rates to 1 July 2020. In this video we show
the "cash boost" given to employees earning less than $90,000 for the 4 months, July - October, adjusted in October.
Bringing forward the personal income tax plan will:
• Increase the top threshold of the 19% tax bracket to $45,000 (from $37,000)
• Increase the top threshold of the 32.5% tax bracket to $120,000 (from $90,000)
Employers have until mid-Nov to update their tax tables in their payroll. Xero updated this automatically on 22 October.
As the tax reduction applied from 1 July 2020 it means 'technically' employees have overpaid their taxes from 1 July until the tax tables
are updated. They don't lose this amount as they will then get a refund when they lodge their 30 June 2021 tax return, but
if you want to give your team a "cash boost" now and not to have to wait until 30 June 2021, you can adjust manually the PAYG
withholding to update the tax withheld to the new lower tax rate. Here's how:
Please don't hesitate to contact the team at Smart Business Solutions on 03 5911 7000 if you require any
assistance.
Changes are coming about how you manage Xero payroll with Single Touch Payroll (STP) Phase 2. This video explains how to manage Employee Transition in STP Phase 2.
