Tax Table Update

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  • Updated 7 months ago
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On what date should the 2018 tax table update be applied in Australia? On 1 July? What happens with pay periods which cross over both financial years?
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Andy D

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Posted 7 months ago

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John Graetz

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Andy.  Both the tax rates and the payment of salaries/wages are governed by the date of the payment, not the period that they relate to.  For example, a pay period that ends on Friday 29/6/18 which is only processed/paid on Monday 2/7/2018, will have the 2018/19 tax rates applied and the gross salaries component will appear on 2018/19 Annual Payment Summaries.

John L G

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Andy D

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Hi John, thanks for the info. Our company pays fortnightly, and so for example we will have a pay date early July which covers a working period crossing June and July. As an example, working fortnight = 24/06/18 to 07/07/18 with pay date 09/07/18. 
So what you're telling me is that 2019 tax rates will apply to this, including the period in June? And therefore I should have my tax table update done before that pay run, but it doesn't matter which particular date?
I'm not an accountant, btw...
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John Gibson, Accredited Partner

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Pays dated 30th June 2018 or earlier will use the 2017 rates (whether or not the pay covers 28/06/2018 to 03/07/2018 for example) and will be included in the 2017/2018 PAYG Certificate. If the tax table update is then installed after the last pay of the year, the next pay - after update - will use the new rates (even if there are some days dated 30th June or earlier). Some Reckon users will not install tax table updates immediately - for whatever reason - and pays after 1st July may still of course be processed using the old rate - one or two pays using the old rate generally does not matter too much unless there are significant changes to the pay scales (but better to have the new rates installed asap around / after 1st July!)
The date on the pay 'cheque' is the date determining which year the pay falls into. A pay dated 02/07/2018 will not appear on the PAYG Certificate until 2018/2019 year (even if the pay covers 28/06/2018 to 03/07/2018) - in other words the employee declares the income in the year of receipt.
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John Graetz

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It is also usual for Reckon to issue notices around the end of June, warning you to apply the tax table update, prior to running your first pay in July.  As John Gibson pointed out, using an old tax table could result in somebody having more tax taken out than is necessary.

John L G.

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Kevin Russell, Accredited Partner

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Or less John
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John Graetz

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Absolutely correct Kevin

John L G

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Andy D

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Thanks for the info.