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.

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