ATO ready to implement tax cuts following Labor’s assurance

In accordance with longstanding practice, the ATO confirmed it will publish updated tax withholding schedules as soon as possible after bipartisan support has been confirmed for the Treasury Laws Amendment (A Tax Plan For The COVID-19 Economic Recovery) Bill 2020 containing the amendments to bring forward the announced tax cuts.

"We will publish updated tax withholding schedules at ato.gov.au/taxtables," the ATO said in a statement. 

"Employers may need a short time to make the changes in their payroll processes and systems in order for the tax cuts to be reflected in people’s take home pay."

The ATO confirmed it will work closely with providers of payroll software and employers to ensure the reduced withholding associated with the threshold changes and the increase of LITO is reflected in software as soon as practicable.

The Tax Office explained that the adjustments to the withholding schedules are designed to ensure that taxpayers have the correct amount of tax withheld from their pay going forward, acknowledging that it is not possible for the ATO to determine the extent of ‘over-withholding’ that may have occurred for each and every taxpayer.

"This is highly dependent on individual circumstances and will be different for everyone," said the ATO. 

The office noted that any ‘over-withholding’ that occurred prior to the employer updating their payroll software and processes will be included in the tax assessment of the employee at the end of the income year.