The ATO has recently updated tax withholding schedules to reflect the 2020/21 income year personal tax cuts announced in the recent federal budget. Updated tax tables are available at ato.gov.au/taxtables.
Employers now need to adjust their payroll systems for the new tax rates to be reflected in employee’s take home pay. The overall payroll expense for your business remains the same; the increase in employee’s take home pay means that you would withhold lower PAYG tax.
Employers must make sure they are withholding the correct amount from wages from no later than 16 November onwards.
If you use Xero, the new tax table is now live. This means that when you process your next payrun, you will see changes to your employees tax withholding and their take home pay.
Reach out to our team for more information.