New Financial Year - Payrise?

[tr3nt]

Hey guys

Now, I'll open my question with the fact that I understand VERY little regarding tax and thresholds and all that kinda shebang - I understand within my threshold of Annual income, I pay +/- 8% of income in tax.

Having said that, I have a workmate (who blabbers on a shit load, and it's very hard for me, or anyone else in the company for that matter, to understand what he's saying - moreso to comprehend this - he does however, spend a lot of time reading up on Government/Politics and ATO.

He was saying today, something along the lines of from the beginning of the financial year (July 1) we're going to be eligable for less income tax, meaning that the average income earner (by average im talking in the 40k pa. mark) we're entitled to +/- $50 MORE per fortnight in pay? (obviously the breakdown continues to + -$25 p/week and -/+ $100 p/month in pays)

Can someone with education within this field fill me in, in plain english rather than using a lot of technical terms?

Cheers.

[Reaper]

He is correct. The marginal tax rates are lowered effective July 1.

Tax rates 2009-10 Taxable income

Tax on this income
$1 – $6,000 Nil
$6,001 – $35,000 15c for each $1 over $6,000
$35,001 – $80,000 $4,350 plus 30c for each $1 over $35,000
$80,001 – $180,000 $17,850 plus 38c for each $1 over $80,000
$180,001 and over $55,850 plus 45c for each $1 over $180,000

2010 to 2011 Financial year Australia Personal Income Tax Rates:

$0 – $6,000 - Nil
$6,001 – $37,000 - 15c for each $1 over $6,000
$37,001 – $80,000 - $4,650 plus 30c for each $1 over $37,001
$80,001 – $180,000 - $17,550 plus 37c for each $1 over $80,000
$180,001 and over - $54,550 plus 45c for each $1 over $180,000

A $40,000 a year worker should pay around $300 less income tax per year (or there abouts). Don't spend it all at once!

Reaper

[tr3nt]

Ahh ok.. All I guess I wanted to know from his mumbo jumbo that he was explaining was - ok.. I should expect an extra +/- $50 in my pay per fortnight lol. he referred me to look up the 2010-2011 May Budget or some shit, but it confused the hell out of me - Quite scary thinking the fact that numbers and figures worry me, yet I work for Australias largest non banking financial organisation :-\

Cheers mate.

[minux]

lol, $1300 a year tax cuts?

Good luck with that.

[danja]

If your employer withholds PAYG instalments on your behalf (most do, it'll be on your payslip), then they should vary the amount withheld to reflect the new tax rate. If they don't, you should be able to ask your HR department to alter your PAYG withholding amount, or alternatively you'll get the extra tax you paid refunded when you file your tax return.

Basically, cutting out all the mumbo jumbo, you get paid a certain amount each year (say $40,000), in most situations your employer deducts from your pay whatever tax you're expected to pay (just under 14% if you earn $40k) and gives this straight to the ATO. When you file your tax return, you do a much more detailed assessment of your tax obligations, and depending on your circumstances you may owe extra tax (say you had some successful investments, you'd have to pay tax on any money you made), or you may be owed a refund (if say your employer had been withholding too much tax). At this point the books get balanced, and you pay money/get a refund and it's all sorted out anyway.

In short, if you really want to know, talk to your HR department about if you're going to get $50 or whatever extra each pay packet, otherwise you can hang tight till tax time and it'll all get sorted out then anyway.

[anonymousmoose]

wooohooo, 3 pay rises this year... pays to be a public servant sometimes [sarcasm intended].

[CSP]

I negotiated a $10k pa pay rise with my boss this year. Not much but I also managed to get stock options. Got to love getting out of the Public Service 3 years ago! Stupid Labor and their damn limited enterprise agreements!