Tax cuts introduced in the recent Federal Budget must be implemented by 16 November 2020. Is your business ready?

The Federal Government introduced personal income tax cuts as part of their 2020–21 Federal Budget. Now it is up to all employers to adjust their payroll processes and systems to ensure the extra dollars end up in employees’ pockets.

You can use the tax tables provided by the Australian Taxation Office (ATO) to ensure your service is withholding the right amount of tax for staff. Employers must apply these updated tax rates for any pay runs processed from 13 October 2020 and no later than 16 November 2020 onwards.

The complexity of implementing these adjustments may be different for each employer. As such, some employees may notice the tax cuts reflected in their take-home pay within a few days or weeks, while for others it may be longer.

According to the ATO, any withholding on the old scales will be taken into account in employees’ next tax return.

The Australian Childcare Alliance (ACA) NSW recommends service providers contacting their payroll technology/platform/software supplier to ensure compliance with the 16 November 2020 deadline.

PUBLISHED: 27 OCTOBER 2020