New PAYG withholding schedules from October

PAYG witholding, PAYG, tax schedules, synergy accountants, toowoomba

September 20, 2016

The government says the ATO has confirmed that it has issued new PAYG withholding tax schedules to reflect the lower personal tax rate contained in the Treasury Laws Amendment (Income Tax Relief) Bill 2016. The changes will increase the middle income tax bracket (the threshold at which the 37% rate commences) from $80,000 to $87,000.

Employers will be required to lower the amount of tax withheld for affected taxpayers to factor in the new lower tax rate effective from 1 October. Any tax overpaid beforehand will be refunded by the ATO on assessment after the end of the 2016/17 financial year. This means that all affected taxpayers will be able to obtain the benefit of the cut within one month of new PAYG withholding tax schedules being published.

In the meantime, the ATO has made the Taxation Administration Act Withholding Schedules October 2016 (F2016L01380, registered on 2 September 2016) to give effect to the new arrangements from 1 October 2016. The instrument contains eight new withholding schedules.

For further information or if you have any concerns please contact your accountant