The ATO has now updated tax withholding schedules to reflect the 2020-21 income year personal tax cuts.
Updated schedules are available at ato.gov.au/taxtables
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.
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. Any withholding on the old scales will be taken into account in the employee’s tax return.
The ATO is committed to supporting employers and businesses through this change.
