Good news to the people of Australia that tax cuts will start hitting your bank accounts soon after COVID-focused budget. Yes, millions of Australian workers will see a boost in their pay packets as a result of the revamped 2020 Federal Budget. Initially, these tax cuts were scheduled for 2022 to 23 financial year. Due to the coronavirus pandemic, the tax cuts are bought forward. According to our tax lawyer in Perth, the changes in the taxation system will increase from $37,000 to $45,000 for a 19% threshold and from $90,000 to $120,000 for 32.5% threshold. This tax relief package is a part of COVID-19 economic recovery plan that’s aimed to create new jobs, rebuilding economy, and securing the future of Australia. Putting extra money into the pockets of Australians allows them to spend more at the local shop, thereby helps create new jobs.
The new taxation policy has included $17.8 billion tax cuts to the payroll procedures, which will increase the funds you will take home. These changes will be implemented soon and will be influenced by the following factors.
- Your pay structure
- The responsiveness of the business you work
So, it’s recommended to talk to your employer right away to know when you can reap these benefits. The ATO has asked employers to file recent tax cuts as soon as possible and ensure that they are withholding the correct amount for the salary paid to the employees.
2020 Tax Cuts
According to the 2020 Federal Budget Tax Cuts, workers earning more than $50000 and $90000 will receive an extra $1080, and those who are earning more than $120000 will receive $2,565. In addition to this, the Government is also looking for ways to reduce the 37% tax rate to 30%. While there is no confirmation on the start date of these tax cuts, the changes are expected to happen in time for Christmas. A senior economist stated recently that the tax cuts and low-interest rates are focused on increasing retail spending and creating more jobs.
The ATO will adjust the tax threshold schedule and will be sent to the employers, and once they update accounting and payroll systems, the tax cuts will be rolled out. Some sources say that the people who are paid monthly are the last to see these changes, but they’ll begin to see the changes on their payslip by the end of November. Any employees who do not see the changes in their wages or pay sip by the end of November should not leave it for weeks or months. They must talk to their employer or the employer’s payroll department. Schedule an appointment with your tax law firm in Perth for more information.