The 2014-15 Australian Budget includes a number of changes that affect the calculation of payroll for Australian employees. These are summarised below. If you are using our DataPay Enterprise Payroll application then relax knowing that all of these changes have already been programmed into the software and you do not need to install updates.

 

Key Items Affecting Payroll:

  • Whilst there will be no changes to personal income tax rates, the government will proceed with the 0.5% increase to the Medicare Levy to help fund the National Disability Insurance Scheme announced last year bringing the Medicare levy to 2% per annum.
  • The low income threshold for families will be increased to $34,367. The additional threshold amount for each dependent child or students will increase to $3,156. Low income families will continue to be exempt unless their incomes increased by more than CPI.
  • Individuals with income of $180,000 or more per annum will pay a 2% Budget Repair Levy for every dollar of taxable income. This temporary levy will continue for 3 years.
  • The Dependent Spouse Tax Offset will be removed.
  • Cancellation of The Mature Age Workers Tax Offset. In its place, the Government will provide a wage subsidy to encourage the hiring of mature age workers. Employers who hire a mature aged job seeker, aged 50 years or over who has been receiving income support for at least six months will receive $3000 after 6 months of employment, $3000 after 1 year of employment, a further $2000 after 18 months and another $2000 after 2 years.
  • Employer Superannuation Guarantee (SG) - As of 3 September 2014 under the mining tax repeal amendments, the current 9.5% contribution will not come into effect until 2025. For the full article please follow "(AUST) Superannuation Changes".
  • Individuals that made personal contributions to superannuation in excess of their non-concessional contribution cap from 1 July 2013 will have the option to withdraw these amounts and any associated earnings. The associated earnings will then be taxed at their personal tax rate.
  • Students with Higher Education Loan Program (HELP) debts will be required to repay their loans sooner (once they earn $50,638 per annum or more).

HELP Rate Changes

 

HELP Repayment Income (HRI*)

Repayment Rate

Below $53,345

Nil

$53,345 - $59,421

4.0%

$59,422 - $65,497

4.5%

$65,498 – $68,939

5.0%

$68,940 - $74,105

5.5%

$74,106 - $80,257

6.0%

$80,258 - $84,481

6.5%

$84,482 - $92,970

7.0%

$92,971 - $99,069

7.5%

$99,070 and above

8.0%

 

  • Fringe Benefits Tax (FBT) increasing to 49% to prevent high income earners from using fringe benefits to avoid the levy. The increase in the FBT rate will be from 01 April 2015 to 31 March 2017 to align with the FBT year.
  • Paid Parental Leave will be introduced on 1 July 2015, providing six months paid leave including superannuation to a maximum of $50,000.
  • The pension age increases to 70 by 2035.  This will affect anyone born on or after 1 January 1966.

If you have any queries please do not hesitate to give us a call on 1-800-048-006.