Accounts HQ Pty Ltd

This year a Temporary Flood and Cyclone Reconstruction Levy (flood levy) will apply to employees with an income over $50,000 for the 2011/12 year only.  The levy has been incorporated into the PAYG Withholding tax tables you use to withhold amounts from their salary or wage.

There are some exemptions for those that were unfortunate enough to be affected by a disaster or received the Australian Disaster Recovery Payment, so if you believe you may fall under the exemption please check the ATO web site.

How is the Flood Levy Calculated?

For every $5,000 over $50,000 an employee earns - they will be charged $25 flood levy for the year - which is withheld during each pay period (weekly, fortnightly or monthly).

For example, Wayne is on a salary of $65,000 so will be charged an annual flood levy of $125.  He is paid weekly, so will pay a weekly flood levy of $2.40 per week.

Or to explain another way, $65,000 - $50,000 = $15,000 over the flood levy base wage level.  $15,000 divided by $5,000 = 3 x $25 per year.  This gives us the annual flood levy total of $125, when divided by the number of pay runs in the year (Wayne is paid weekly, so there are 52) so he will be levied $2.40 per week.

Of course, if this is making your brain hurt just use the calculator provided on the ATO web site.

Accounts HQ is Perth, Western Australia's leading outsourced accounts and bookkeeping service. Our friendly team of bookkeepers are experienced in Xero, Paycycle, MYOB and Quicken and can help to make sure you get the most out of your financials.

The beginning of a financial year brings those of us in business many great things - new energy to make this year better than the previous, and a chance to review the previous year and reflect on our successes and learnings (we don't like to call them mistakes).

It also brings with it the first of the end of year compliance dates - Payment Summaries (previously called Group Certificates) for your employees are due to be issued by the 14th July. 

The new PAYG Withholding schedules for 2011/2012 have been released by the Australian Taxation Office.

If you're using accounting or bookkeeping software, such as MYOB or Quickbooks and pay employees, please don't forget to update your software prior to your first pay run for the 2011/2012 year.

Paycycle subscribers on the other hand can sit back and relax knowing that the 2011/12 tax tables have already been updated for them, at no extra charge - it is all part of their awesome cloud based payroll service.

And if you're still calculating youremployee pays in a wages book and using your brains instead of a computer, then you can find the new tax tables here.

Accounts HQ is Perth, Western Australia's leading outsourced accounts and bookkeeping service. Our friendly team of bookkeepers are experienced in Xero, Paycycle, MYOB and Quicken and can help to make sure you get the most out of your financials.