The 2016-2017 Australian Budget will affect the calculation of payroll for Australian employees. This section will outline a number of tax changes that will need to be made for the financial year. 

SUPERANNUATION

·         Maximum super contributions base increases from $50,810 to $51,620 per quarter.

SUPERANNUATION PERCENTAGE

·         Will remain at 9.50% up until 30 June 2021.

If you are using our DataPay Payroll application you can sit back, relax and leave the above amendment to us as these changes have already been programmed into the software.

However, for the “Redundancy: Tax-Free Limit” you will need to calculate this value when applying Employee Termination Payment (ETP)

ETP CAP

·         Life Benefit termination payment ETP cap will remain at $195,000.

·         Death Benefit termination payment ETP cap will also remain at $195,000.

The Whole of Income cap remains at $180,000 as this is a non-indexed figure.

REDUNDANCY: TAX-FREE LIMIT

·         Tax-free base amount increases from $9,780 to $9,936 for the first year.

·         Tax -free amount for completed years of service increases from $4,891 to $4,969.

The following changes are handled by your Superannuation Fund Provider and not through our payroll system:

CONCESSIONAL SUPERANNUATION CAP (for Employer Contributions and Salary Sacrifice Amounts)

These figures will remain unchanged.

·         For employees aged under 49 years, the cap is maintained at $30,000.

·         For employees aged 49 years and above, the cap will also be maintained at $35,000.

CO-CONTRIBUTIONS (for Personal after Tax Super Contributions)

The Government Co-Contribution scheme will increase from 1 July 2016.

·         The lower income threshold will be $36,021.

·         The higher income threshold will be $51,021.

·         The maximum Co-Contribution will remain at $500 for 2016-2017.

Non-Concessional Superannuation Cap (for Personal after Tax Super Contributions)

·         Remains at $180,000.

Other Legislative Changes

The Fair Work Commission announced their decision for the 2015-16 Annual Wage review:

·         The national minimum wage will increase by 2.4% to $672.70 per week, with the minimum hourly rate rising to $17.70 per hour

·         Rates in Modern Awards will also increase modern award minimum wages by 2.4 per cent (weekly wages will be rounded to the nearest 10 cents).

The increase is slightly lower than for 2014-15 which saw a rate increase in the minimum wage of 2.5%.

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