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June 15—Many of the formulas for calculating withholding amounts for payments to individuals will change July 1, 2015, the Australian Tax Office said June 12. Amounts to be withheld from payments made weekly, fortnightly, monthly and quarterly, as set out in the relevant Pay As You Go withholding tax table, can be calculated using the formulas and coefficients detailed on the Tax Office's website.
For foreign residents, the brackets remain the same but the minimum tax rate will be 33 percent as of July 1, up from 32.5 percent.
While the minimum and maximum tax rates on resident income remain the same, the rates and brackets between the 19 percent minimum and the 49 percent maximum are changing.
The updates to the rates for when the tax-free threshold is not claimed include the deletion of the third bracket, varying updates in all of the bracket amounts, an increase in the second bracket to 23.41 percent from 23.21 percent and an increase in the third bracket (previously the fourth) to 35 percent from 34.50 percent.
The updates to the rates for when the tax-free threshold is claimed include the deletion of the fifth bracket, varying updates to the first three bracket amounts and an increase in the sixth bracket (previously the seventh) to 35 percent from 34.5 percent.
The parameters for the Medicare levy also were updated, with increases to the weekly earnings threshold, the weekly earnings shade-in threshold, the Medicare levy family threshold, the additional child amount and the weekly levy adjustment factor.
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The Australian Tax Office's withholding rates for 2015 are available in OPS 2015/2 at: http://law.ato.gov.au/atolaw/view.htm?docid=%22OPS/OPS20152/00001%22.
The Tax Office's withholding rates for 2014 are available at: https://www.ato.gov.au/Rates/Schedule-1---Statement-of-formulas-for-calculating-amounts-to-be-withheld/.
More information on payroll issues in Australia can be found in the Australia country primer.
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