It makes perfect sense that if you are paid monthly you receive 12 pays per year, if you are paid fortnightly you receive 26 pays per year and if you are paid weekly you receive 52 pays per year…but every now and then this isn’t quite correct!

Of course the number of monthly pays received will never change…but depending on the day your pay period ends, and the day payment of those wages are made – in some years you may receive 27 fortnightly payments or 53 weekly payments…

But what does this mean for you?

Essentially it means that if you do not adjust the amount of Pay As You Go Withholding (PAYGW) from your wages, you might end up having to pay some tax at the end of the year – and I’m yet to meet anyone who likes doing that!

The reason for this is that the PAYGW tables issued by the Australian Taxation Office (ATO) and used by all employers, are based on 26 fortnights or 52 weeks…these tables are not updated for this calendar anomaly because the impact will never be the same for everyone…as I said, it depends on the day your pay period ends, and the day payment of those wages are made.

To work out if this applies to you, I ask you this question – did you receive a wages payment on Wednesday 1st July, 2015 or Thursday 2nd July, 2015?  If you answered yes, then this applies to you!

BUT – you have to ask your employer to withhold extra PAYGW, to find out how much, take a look at the ATO website.

Employers – it might be a good idea to send your employees a link to this post so they can make a decision for themselves…

Regards

Each and every year I look forward to today – it’s almost like a new beginning, albeit halfway through the year!

The days and weeks leading up to 30th June are traditionally busy times for accountants and their clients (as well as financial advisors and lawyers), with lots of plans being implemented…all of a sudden there is a very urgent deadline!

So why do we look forward to today?  Because if it wasn’t done at the end of yesterday…then it has no impact on last financial year and the pressure is off!

But that doesn’t mean we stop working…oh no, no, no…in fact I really love this time of the year – having the chance to help everyone lodge their tax return and (hopefully) get a tax refund – as well as assisting businesses to put plans in place for the next financial year.

As a business you should be looking to finalise your budget for 2015/16 and fine tune any accounting systems – all while reconciling last financial year.  I know many of you leave your financial statements and tax returns to late in the year to be prepared, but there is no penalty for getting them done earlier!  Just because you complete them earlier, doesn’t mean you have to actually lodge them, and you certainly don’t have to pay any earlier…so have a think about it.

The Tax Chic is here to help with all of the above, I look forward to hearing from you.

Regards