The Australian Taxation Office's (ATO) website advises that staff whose pay day falls on 1 July 2004 will have 27 pay days in the 2004/05 financial year. Details are available from the ATO website at http://www.ato.gov.au/businesses/content.asp?doc=/content/45335.htm

Agencies are advised that funds for the staff pay for the fortnight period ending 1 July 2004 should be released in the usual way.

The standard fortnightly Pay As You Go tax schedule issued by the ATO is based on 26 pays, therefore there is potential for staff to be undertaxed in the 2004/05 financial year.

The ATO has suggested that staff members concerned about being undertaxed consider having additional tax amounts withheld from their earnings. Additional deductions suggested by the ATO are set out below:

Fortnightly earnings Additional withholding per pay
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$840 - $2,199 $6
$2,200 - $2,699 $15
$2,700 and over $20

Amounts are based on new tax rates for 2004/05 announced in the May 2004 Budget.

Agencies should advise staff members of the above and make the necessary arrangements to allow staff to authorise additional taxation deductions during the 2004/05 financial year.

Staff who claim family tax benefits or tax offset amounts through reduced withholding will also find that there is a further shortfall in tax withheld. Again this may be addressed through increased tax deductions. Calculations for increased deductions are provided on the ATO website.

Staff should also be advised that the additional pay day may affect the amount of their family tax benefit entitlement. Staff should use their full annual income when estimating their family tax benefit amount.

Advice to staff should note that the decision to increase tax deductions is an individual choice and that staff should consider their own financial situation or seek financial advice before altering tax deductions.

Superannuation payments may also be affected by the additional pay period. Agencies should contact their relationship manager at Pillar Administration Corporation if they have any queries.

C Gellatly
Director-General

Issued : Employee Relations and Workforce Planning Services (Public Employment Office)
Contact: Gayle Robson, Senior Industrial Officer
EMail: [email protected]
Telephone no: 9228 3165 Facsimile: 9228 4056
File no:
Date: 21 June 2004
This circular does not supersede any other Memorandum/Circular

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not current