The Government will apply a flood levy to help fund reconstruction in flood affected areas. The flood levy will apply to individual’s taxable income only in the 2011-12 financial year.
A levy of 0.5 per cent will be applied on that part of an individual’s income between $50,001 and $100,000 and a levy of 1.0 per cent will be applied on that part of the taxpayer’s taxable income above $100,000. No levy is payable where the person has income of $50,000 or less.
For example, for someone who has an income of $80,000 this means the cost of the levy to them will be $2.88 per week.
Taxable Income
($ p.a) |
Levy Amount
Per Week* ($) |
| $15,000 |
$0.00 |
| $20,000 |
$0.00 |
| $25,000 |
$0.00 |
| $30,000 |
$0.00 |
| $35,000 |
$0.00 |
| $40,000 |
$0.00 |
| $45,000 |
$0.00 |
| $50,000 |
$0.00 |
| $55,000 |
$0.48 |
| $60,000 |
$0.96 |
| $65,000 |
$1.44 |
| $70,000 |
$1.92 |
| $75,000 |
$2.40 |
| $80,000 |
$2.88 |
| $90,000 |
$3.85 |
| $100,000 |
$4.81 |
| $110,000 |
$6.73 |
| $120,000 |
$8.65 |
| $130,000 |
$10.58 |
| $140,000 |
$12.50 |
| $150,000 |
$14.42 |
| $160,000 |
$16.35 |
| $170,000 |
$18.27 |
| $180,000 |
$20.19 |
| $200,000 |
$24.04 |
| $250,000 |
$33.65 |
| $300,000 |
$43.27 |
Where the person has received an Australian Government Disaster Recovery Payment in relation to a flood event in 2010-11 they will be exempt from the levy.
Taxpayers will not have to do anything extra to pay the levy. People will make their levy payments through the tax taken out of their regular pay in the same way that people pay the Medicare levy. This will help prevent taxpayers from receiving a tax bill at the end of the financial year.
Pay As You Go (PAYG) Instalment taxpayers will have the levy charged in their PAYG instalments. People who received an Australian Government Disaster Recovery Payment can seek a variation to their instalment payment so that they don’t have to pay the levy. The ATO is also investigating the possibility of automating PAYG Instalment amounts so that people who don’t have to pay the levy are not charged an amount in their PAYG instalments.
Employees who are exempt from the levy ask their employer to not have the levy withheld from their regular pay with other tax withheld. Alternatively, at the end of the year the ATO will assess taxpayers’ tax liability taking into account the exemption from the levy.
Businesses will need to apply a new withholding schedule to their employees to withhold levy payments.
Businesses will not be required to pay the levy. The levy will be applied to individual taxpayers.
Business who use a Payroll System will need to make sure that their vendor upgrades their system for the 2012 financial year to handle this levy.
If you calculate your payroll manually then the ATO will provide an updated tax tables prior to the 2012 financial year starting.
If you have any queries please contact ProAcct on 03 9880 9600.
