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TOPIC: 27 Fortnightly Pays for 2015/2016 Financial Year

27 Fortnightly Pays for 2015/2016 Financial Year 5 years 7 months ago #453

  • steph
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About every 11 years something special occurs and we end up with 27 fortnight pays instead of the usual 26 pays. So why does this occur? Well, 26 fortnights is based on 364 days in a year - so when a leap year occurs (as in 2016), this can result in an extra pay period falling within the financial year.

The withholding tax tables you or your employer uses to calculate tax from your fortnightly pay are based on the standard 26 fortnights, so - in the case of a 27 fortnight year - you will not be deducting enough tax.

What pay periods are effected?

The pay periods within the 2015/2016 financial year that are effected will be any fortnightly pays that following the payment sequence beginning with either Wednesday 1st of July 2015 or Thursday 2 July 2015 (January's first pay dates for this sequence will be Wednesday 13th of January 2016, or Thursday 14th of January 2016).

So what will happen?
If you are expecting a tax refund at the end of the year, this may not occur and you may even have to pay additional tax.

What can be done?
An employee can request in writing that additional tax be deducted to account for the shortfall. The Australian Tax department supplies the following guidelines for additional tax required:

The Tax Office has supplied the following suggested guidelines to help maintain the correct amount of tax for each pay period:

Fortnightly earnings* Additional withholding per pay
$1,400 to $3,049 $12
$3,050 to $6,799 $17
$6,800 and over $42
* These amounts are based on 2014 tax rates.

Refer to ATO guidelines, or speak to your payroll support specialist for further advice.
Stephanie Lee
Imprest Business Services
www.imprest.net.au
Facebook: www.facebook.com/Imprest.Bookkeep
"Professional bookkeeping and administration Services"
Last Edit: 5 years 7 months ago by steph.
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