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Govt Paid Maternity Leave
21 replies to this topic
Posted 10 January 2013 - 12:46 PM
Hi everyone, I’m just trying to work out my budget while I am off on mat leave later this year and am trying to work out an estimate of how much I will get back from the govt paid mat leave after tax. For those of you that know how to work it out can you please help me
Posted 10 January 2013 - 01:01 PM
As far as I know, it depends on your tax rate, so no one can work it out for you, really, as everyone will have a different rate
Posted 10 January 2013 - 01:03 PM
try http://www.ato.gov.au/scripts/taxcalc/calc...ndard_hire.aspx to calculate based on your circumstances :-)
Posted 10 January 2013 - 01:07 PM
isn't that tax calculator to calculate the tax I'm paying on my current wage?? Does the Govt Paid Mat leave tax rate get charged on my current tax rate?? I'm really confused...
IS there anyone out there currently receiving it that can help me work it out..
I'm assuming the current minimum wage is now approx $608.. From what I read on the medicare site, if you don't have a job (which I may not have) when I have bub you will get taxed at a rate of 25%.. So does this mean I may be getting in the hand $454.80 per week? If I do go on mat leave I will not be entitled to paid mat leave from work so I will be reyling on this as well as my husbands income..
Edited by Wishing2011, 10 January 2013 - 01:12 PM.
Posted 10 January 2013 - 01:18 PM
Generally PPL is paid into your account by your employer - the amount of tax witheld will depend on the tax rate your employer applies, whether you have a HECS/HELP debt etc. the tax rate applied would also be effected by whther you are taking paid leave from work at the same time. For example it is possible to have PPL paid at the same time you are utilising annual leave, long service leave etc.
There are circumstances where Centrelink will pay PPL into your account, but this is not the norm.
So it is really difficult for someone to work it out for you as our circumstnaces may not be the same and we do not know what your taxable income for the financial year will be and whether you have a HECS/HELP debt.
Posted 10 January 2013 - 01:21 PM
To estimate mine, I just applied my current tax rate to the $608 - I figured it out from a recent payslip. It's just an estimate but was helpful for a rough budget.
Posted 10 January 2013 - 01:24 PM
I know my employer continued to tax me at the same tax rate I was on when I was working during my paid parental leave period. This just meant I got a larger tax return and timing wise it working out well for us as it was like a forced saving. I recommend that you talk to your payroll department to see what their policy is and how they will calculate your tax for the period.
Posted 10 January 2013 - 01:25 PM
If you are on a higher tax bracket you will be taxed at that rate for mat leave, if you are on the lowest one you will be taxed at that one. If you are taxed to much you will get it back at tax time. That is for an employer. It could well be that if the govt is paying it (in cases where you have a contract or have been made unemployed but still meet the test) they may tax you at 25% to ensure you do not end up with a tax debt at the end of the year. Remember if you are not taxed enough there will be a tax debt.
Posted 10 January 2013 - 01:27 PM
I'm currently contracted so I don't know if they will keep me on. They are talking about making me permanent but if they find out I am pregnant they might not. My contract ends in June so I may not have an employer. I have no HECS debts. if it is as simple as applyign my current tax rate then that's fine. I just have no idea how to work it out.. they dont make it easy for you to work out.. Should I call centrelink maybe?
thanks ladies if it is as simple as working out my current rate then I will work with that for now
Posted 10 January 2013 - 01:29 PM
It depends on how much you will earn in that week as to what the tax rate will be.
For example, if you choose to be paid the PPL at the same time as Maternity leave payments from your employer, then you will pay more tax than if you take the payments once your employer payments finish. Tax is calculated on the amount you earn in the payment period and adjusted accordingly- it is not calculated on how much you may earn for the year.
So, if you are only receiving the PPL in a payment period then you will pay a very small amount of tax, the calc previously posted can help you work this out.
Whichever way you take it though, your tax will be corrected when you do your return.
Posted 10 January 2013 - 01:30 PM
I started mine in a new financial year and asked my employer to take tax out at the applicable rate, not my salary tax rate. As it was my only income for that financial year it was easy to do.
If you want them to do this it should be straightforward.
Posted 10 January 2013 - 01:31 PM
To figure out how much tax you will need to pay on it accurately, you need to calculate how much tax you will pay for the whole year.
To do this, you will need to first know how much you will earn for the year.
You work full time for 4 months on a salary of $90k = $30k.
You get 18 weeks PPL at $608 pw = $10,944
You take the rest of the year as unpaid maternity leave.
Total earnings $40,944
Estimated tax $6242, or 15%.
Posted 10 January 2013 - 01:34 PM
i am not sure how many times people can answer your question.
The tax in the end will be based on what you earn for the financial year in which you receive the income. So if you finish you current job at the end of june, and dont work for a full 12 mths, the final tax will be zero. So any tax taken out will be returned in your tax return.
If you take the 18weeks off then earn another $180K or so in the remainder of the tax year, the tax rate will the top tax rate.
So what rate the govt takes out will affect what you get in your hand at the time, but not overall, as the tax return may take more or give some back.
Posted 10 January 2013 - 01:45 PM
This is a bit of an aside - but PP said it is "not the norm" for Centrelink to pay PPL. When I was paid PPL in 2011 when I had my son it was totally optional for employer to pay it or not (until the next fin year started) Mine said too hard blah blah, lazy - didn't think they would get the money from the government in a timely fashion.... so I just claimed through Centrelink. So this time around (Due in May) I started looking into it thinking I would HAVE to get my employer to pay it and they will f it up if I don't sort it out soon..... but the info I found said that because Employers were soooo unhappy about having to administer the scheme that the government changed it and said "ok then we won't make you do it - people can claim through us still".
So my intention is to claim through Centrelink and be taxed flat rate of 15%.
If anyone knows if that info is wrong could you please tell me.... like I said if I HAVE to get my employer to do it I need to start them down that road NOW.
But yes, I would think if my employer is paying me $608 a week then they will tax me as such. As tax is always paid per pay period. They won't take any consideration to what my full time working pay is/ tax is.
Posted 10 January 2013 - 01:45 PM
I am currently getting the PPL paid directly from the govt (before the birth of my son, I was working casually for a couple of different employees) - I net $1,032.00 a fortnight.
I think the tax deducted is based on the scenario where you would be in the minimum wage tax bracket for the entire tax year. The total tax is adjusted at the end of the tax year based on any other earnings leaving you with a bill or return.
Posted 10 January 2013 - 01:45 PM
I just completed my PPL application online. As I will not be working for my employer when the PPL is paid Centrelink will pay it and their process advises they will deduct 15% tax from the payment. You can nominate to have extra taken if want.
If I was continuing with my employer, they would continue to tax as per their current system of payroll as that is how it would be paid.
As others have then said, at the end of the financial year all tax paid is considered against gross earnings and worked out whether you have over or under paid tax.
My contract also ends in June, however I will be going on unpaid leave from March-June so Centrelink will pay my PPL due to the 18 weeks extending past my contract end date. Given you situation sounds similar to mine, I would use the 15% rate that Centrelink quoted me.
Posted 10 January 2013 - 01:54 PM
Thanks naturalgoodness, yes your situation sounds like mine. Easy to work out if it is 15%.. If I need to pay a little bit of tax at the end of the next financial year so be it. I don't plan on working within the 12 months but I might need to and it might push us up to the bracket where I pay more tax again.
I appreciate everyones help. Obviously I'm new to working this all out. So at least now I can work off something for now to plan my budget :-)
Posted 10 January 2013 - 02:00 PM
Ive just gotten off the phone with my HR about this (government)
If I get PPL at the same time at my mat leave payments, I will be taxed in whatever that tax bracket is, which would be high.
If I get the PPL to be paid after my paid leave entitlements run out, and I am on unpaid mat leave, then I will only be taxed on $608 which is the PPL payment, per week. The calculator provided before will work this out for you. You can nominate when you want the payments to start, so I will be taking the second option and getting paid PPL whilst on unpaid mat leave so there is still some income coming in.
If you are not employed at the time then Centrelink will provide your PPL payment and you will only be taxed on $608 per week at the appropriate lowest tax bracket.
Posted 10 January 2013 - 02:02 PM
perfect! thanks that's easy then and good to know in case I was entitled to paid mat leave from my employer.
Edited by Wishing2011, 10 January 2013 - 02:02 PM.
Posted 10 January 2013 - 02:19 PM
sarkazm76 - From the Human Services website - http://www.humanservices.gov.au/business/s...-for-employers/
In most cases, employers provide Parental Leave Pay to their eligible employees. The government provides the necessary Paid Parental Leave funds to employers first.
As an employer, you must provide Parental Leave Pay to an eligible employee who:
Posted 10 January 2013 - 04:11 PM
Thanks for that The above exasperation is that I now have to get dumb and dumber to pay me I've messaged Centrelink to ask them if I can opt to have them pay me instead, ha! Last time all my employer had to do was pay all my accrued annual leave and she f'ed it up and over taxed me by $1000 and ignored all my requests to rectify. For her it's a matter of "oh well you will get it back at tax time". Like everyone can just afford to wait.
Sorry - end rant
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