Businesses are driving jobs growth in Australia and must continue to do so to build a brighter and more secure future.
Imagine you are an employer and have a new staff member starting. You need to pay them and you need to withhold tax from their pay. But how do you know how much to withhold?
There are number of ways to identify how much you need to withhold:
The answers to these questions determine the tax scale that the employer must use to withhold tax for this employee. So the amount of PAYG withheld is dependent on the status of the employee.
Then periodically, Government Budgets get brought in and tax tables within the tax scale may be changed. For example, in the 2016-2017 year, there are changes to the tax scales relating to HELP and SFSS (Student Financial Supplement Scheme) that will alter the amount to be withheld from some wages.
As an employer, you need to use the most recent tax scales to make sure that the amount of tax withheld is correct. With the use of products such as MYOB Essentials and MYOB AccountRight, you don’t need to know or understand the changes, so long as you have the correct tax scale set up for the employee.
MYOB enables you to have the most recent tax scales in place. In MYOB Essentials, tax table updates happen automatically in the background. Therefore, when you enter your first pay cycle for the new financial year you can rest assured this will calculate the correct amount of PAYG tax you are required to withhold as an employer. With users of MYOB AccountRight will have fast and easy updates delivered directly to their software as well by visiting the MYOB upgrade site.
Staying abreast of updates during financial year end is a challenge in itself. Here are some simple tips that may help with ensuring not only tax tables are correct but your payroll processing is as well.
The information provided here is of a general nature for Australians and should not be your only source of information. Please consult an experienced and registered tax agent as each small business’s circumstances will vary.