It makes perfect sense that if you are paid monthly you receive 12 pays per year, if you are paid fortnightly you receive 26 pays per year and if you are paid weekly you receive 52 pays per year…but every now and then this isn’t quite correct!
Of course the number of monthly pays received will never change…but depending on the day your pay period ends, and the day payment of those wages are made – in some years you may receive 27 fortnightly payments or 53 weekly payments…
But what does this mean for you?
Essentially it means that if you do not adjust the amount of Pay As You Go Withholding (PAYGW) from your wages, you might end up having to pay some tax at the end of the year – and I’m yet to meet anyone who likes doing that!
The reason for this is that the PAYGW tables issued by the Australian Taxation Office (ATO) and used by all employers, are based on 26 fortnights or 52 weeks…these tables are not updated for this calendar anomaly because the impact will never be the same for everyone…as I said, it depends on the day your pay period ends, and the day payment of those wages are made.
To work out if this applies to you, I ask you this question – did you receive a wages payment on Wednesday 1st July, 2015 or Thursday 2nd July, 2015? If you answered yes, then this applies to you!
BUT – you have to ask your employer to withhold extra PAYGW, to find out how much, take a look at the ATO website.
Employers – it might be a good idea to send your employees a link to this post so they can make a decision for themselves…