Federal Budget 2020 – New tax withholding rates

Changes to personal income tax thresholds announced by the Government during the Federal Budget have been incorporated into the withholding schedules and tax tables and will apply to payments made on and from 13 October 2020.

As the changes to withholding are made part way through the income year, employers and other payers who are unable to immediately implement these changes into their payroll will have until 16 November 2020 to do so.  Software providers are working on or have already incorporated these updated rates into their payroll systems, however you should check your own system to ensure its correct.

Employees and other payees will receive their entitlement to the reduced tax payable for the entire 2020–21 income year when they lodge their income tax return.

Resident tax rates 2020–21

Resident tax rates 2020–21
Taxable income Tax on this income
0 – $18,200 Nil
$18,201 – $45,000 19 cents for each $1 over $18,200
$45,001 – $120,000 $5,092 plus 32.5 cents for each $1 over $45,000
$120,001 – $180,000 $29,467 plus 37 cents for each $1 over $120,000
$180,001 and over $51,667 plus 45 cents for each $1 over $180,000

The above rates do not include the Medicare levy of 2%.

For more information on the updated rates or for links to the various tax tables, please see the ATO link below.

ATO Tax Tables

 

 

Leave a Reply

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close