This is an important update for all businesses with payroll.
The ATO have announced that from 1st October 2016, some tax tables will change. You must ensure that you use the correct tables for the first pay run after September 30th 2016.
Why has this happened?
The individual marginal tax rate of 37% will start when a taxpayer’s income exceeds $87,000, an increase from $80,000 has come into effect on 1st October 2016.
Do I have to amend employee payroll for July-Sept 2016?
No you do not. The legislation does not include any “catch up” component for payroll already processed this financial year.
What do I tell my employees?
Those employees with annual income exceeding $80,000 may see a small change in their net pay.
What do I need to do?
Manual Payroll:
If you use a manual payroll system you will have to use the new tax tables provided by the ATO which can be found on the ATO website or obtained from our office.
MYOB:
If you’re an existing MYOB Essentials user, your software will be automatically updated with the new tax scales in advance of the 1 October deadline.
For MYOB AccountRight users there will be a 2016.2.2 update made available in the last week of September. This will need to be installed prior to your first pay run in October. Once the update has been installed, simply go the Setup Menu and select Load Payroll Tax Tables. You will then be ready with the up-to-date tax scales.
RECKON:
An updated version of Accounts Hosted 2016 with the new ATO PAYG tax tables is now available. The next time you log into Accounts Hosted, you’ll automatically be connected to the updated version and can begin performing your pay runs with the new tax thresholds.
Reckon 2016 desktop versions will need to be manually updated, by installing the release issued by Reckon.
INTUIT:
Your software will be automatically updated with the new tax scales in advance of the 1 October deadline.
XERO:
Your software will be automatically updated with the new tax scales in advance of the 1 October deadline.
If you require any assistance or have any queries regarding the tax update, contact Forsyths to ensure your payroll system is up to date.