The Australian Government has introduced personal income tax cuts as part of the 2020–21 Budget. They apply from 1 July 2020 and change the rate of tax withheld from employees.
Employers now need to make adjustments in their payroll processes and systems in order for the tax cuts to be reflected in employee’s take-home pay. Employers must make sure they are withholding the correct amount from salary or wages paid to employees for any pay runs processed in their system from no later than 16 November onwards.
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.
Updated tax withholding schedules that reflect the 2020-21 income year personal tax cuts are available at ato.gov.au/taxtables.
We expect software providers to update their systems in due course.
Please contact our office if you have any queries or require further information.
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