Home Topics Finance Payroll platforms work to implement new tax tables for SME customers

Payroll platforms work to implement new tax tables for SME customers

With the news of the 2020 Federal Budget bringing forward the Coalition’s three-stage tax cut package, Payroll SaaS platforms are working to implement the new tax tables into their services for their small business customers.

The Australian Taxation Office has announced that as the changes have been made part way through the income year, employers and other payers who are unable to immediately implement the tax cut changes will have until 16 November 2020 to do so.

The ATO also said that changes to the personal income tax thresholds have been incorporated into the withholding schedules and tax tables and will apply to payments made on and from 13 October 2020.

Employees and other payees will receive their entitlement to the reduced tax payable for the entire 2020–21 income year when they lodge their income tax return.

As employers seek to pay their workers the accurate amount, payroll providers are working to have their products updated with the correct tax tables implemented.

Reckon

In a statement released to their customer base last Friday, Reckon announced that they have updated their systems with the tax changes.

“The Government announced changes to personal income tax thresholds for the 2020-21 income year in the 2020 Federal Budget. Changes to income tax tables took effect from 13 October 2020.

We have updated the 2020-21 ATO PAYG tax tables in Reckon One, so there is nothing else you need to do. Pay runs dated from 13 October 2020 automatically use the 2020-21 PAYG tax tables.”

Xero

Xero is yet to have updated their software to reflect the new tax tables, however hope to have done so by the end of the week.

Matthew Prouse, Head of Industry, Xero Australia has said: “Xero is updating the tax tables in Xero Payroll to match the new withholding rates and this update will be made within the next week.

In the meantime, employers may choose to look up the new amounts using the ATO tax tables, and add a manual PAYG adjustment into the payslip. The new tax table specifications became available on Monday 12th October, with effect from Tuesday 13th October, although employers have a grace period up to 16th November to start using them.”

MYOB

MYOB is yet to update their products with the tax changes, but endeavour to do so by the end of the month.

Head of Product SME, Dale Dixon, has told Dynamic Business: “The tax cuts announce in the Federal Budget will bring welcome relief to businesses and individuals across Australia. We aim to have all of our products updated with new tax tables by the end of October, ahead of the mid-November deadline.”

Intuit

Intuit QuickBooks has updated their payroll system to reflect the tax rate changes.

QuickBooks Payroll powered by KeyPay has the new tax rates implemented for all new pay runs with a date paid of 13 October 2020 and thereafter.

What are the tax cuts?

Tax cuts scheduled for 2022 have been brought forward meaning more than 11 million taxpayers are eligible for cuts backdated to 1 July 2020.

The income tax threshold for 19 per cent will increase from $37,000 to $45,000, and lifting the 32.5 per cent threshold from $90,000 to $120,000.

In 2020-21, single low and middle income earners will receive up to $2745 tax relief and dual income families can receive up to $5490 in cash.

  • The income owners with $40,000 earnings will have 21 per cent tax reduction
  • The income owners with $60,000 earnings will have 17 per cent tax reduction
  • The income owners with $80,000 earnings will have 11 per cent tax reduction
  • The income owners with $160,000 earnings will have 5 per cent tax reduction

Keep up to date with our stories on LinkedInTwitterFacebook and Instagram.

Listen to this story
Voiced by Amazon Polly
Ellie Dudley
Ellie Dudley is a journalist at Dynamic Business with a background in the startup space and current affairs reporting. She has a specific interest in foreign investment and the Australian economy.
Listen to this story
Voiced by Amazon Polly