ATO Tax Update: Where are My Tax Cuts?
You’ve heard about them…
You’ve read about them…
But when (and how) are you going to receive the personal tax cuts announced in the Federal Budget earlier this month??
Part of the announcement was that the tax cuts were backdated, for all employees, to 1 July 2020. Does that mean you are due a lump sum catch-up amount? Unfortunately, that is not how it will work in practice.
The extra dollars you are eligible for (via the tax cut) will be calculated across the entire year – but it will be paid to you in even installments in your weekly/fortnightly or monthly pay.
The ATO issued updated tax tables on October 13 to allow for these tax changes.
Employers throughout Australia have until November 16 to implement these new tables in their payroll cycle. Those who use payroll software will be provided with system updates to implement the new tax rates. Most people will see an extra $20 per week in their pay packets starting from mid-November.
And the final check will be via your annual 2020-21 tax return. In other words, if you have not received the full benefit of the tax cuts before 30 June 2021, you can expect some extra back in your end of the year tax return.
So, while a lump sum would be nice – as long-term, professional tax accountants our motto is: ANY TAX CUT IS A GOOD TAX CUT!!!