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Tax on overtime


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#1 2 Gorgeous Girls

Posted 21 February 2013 - 06:48 PM

I'm hoping someone can help me out here before I make a fool of myself to payroll.

We have been flat out at work and so the past couple of pay cycles I have been doing overtime. Both times I seem to have been taxed really highly and I don't know why.

I normally get taxed according to the fortnightly tax tables, but with the overtime they don't seem to be using them. I'm getting taxed somewhere between the tax free threshold amount and the no tax free threshold amount.

Last fortnight I earned an extra $140 gross from overtime. I got an extra $14 in my pay packet after tax. I was effectively taxed $126 out of that $140. I have no idea why?

Google doesn't seem to be helping me either.

Combined with the fact that it pushes my gross earnings over the limit for SPP I have become one of those mythical creatures that is worse off for working more!!

Can anyone shed some light the reason for this taxing. I want to help the company out when needed but to lose money from doing overtime (which is paid at time and a half) is just preposterous!

#2 Iwantitall

Posted 21 February 2013 - 06:58 PM

If you earn that much extra every week would it put you in another tax category?  If not they should only be taxing you your normal percentage.  My Dh quite often does overtime (around $300 worth a FN). And still only gets taxed his normal rate as he is still in the same bracket ?  The next bracket starts at $80000 for him


#3 2 Gorgeous Girls

Posted 21 February 2013 - 07:02 PM

I thought about that but I am no where the next bracket of $80,000 and even if I was surely the tax tables would still account for that right?



#4 Lees75

Posted 21 February 2013 - 07:04 PM

Is the overtime putting you over the HECS threshold?

#5 jmaz86

Posted 21 February 2013 - 07:04 PM

Not an expert by any means, but if you have checked the fortnightly tax table against the gross amount and the amount of tax they are taking out does not seem correct to you then I would simply speak to payroll and ask them to clarify because you are confused.
I am sure they wont think any less of you, and perhaps if they are making an error it may not be affecting just you but other staff as well.


#6 jmaz86

Posted 21 February 2013 - 07:05 PM

QUOTE (Lees75 @ 21/02/2013, 08:04 PM) <{POST_SNAPBACK}>
Is the overtime putting you over the HECS threshold?


Didnt think of this...I used to get commission and because I had elected on my tax file dec for my employer to take out hecs I used to once a month get more taken out as I was being put over the threshold.

#7 2 Gorgeous Girls

Posted 21 February 2013 - 07:09 PM

QUOTE (Lees75 @ 21/02/2013, 07:04 PM) <{POST_SNAPBACK}>
Is the overtime putting you over the HECS threshold?


Of course! I knew getting an education was a bad idea...  wink.gif

Thank you so much!

#8 The Falcon

Posted 21 February 2013 - 07:15 PM

If it is only occasionaly overtime them think of it as savings... it would be unlikely to put you over the hecs threshold for the year so you will get a nice refund when you lodge your tax return  original.gif

#9 Alacritous~Andy

Posted 21 February 2013 - 08:26 PM

QUOTE (kate789 @ 21/02/2013, 07:15 PM) <{POST_SNAPBACK}>
If it is only occasionaly overtime them think of it as savings... it would be unlikely to put you over the hecs threshold for the year so you will get a nice refund when you lodge your tax return  original.gif


I'm sure someone will correct me if I'm wrong, but I don't think you get refunded HECS repayments at tax time, even if you are under the threshold.

#10 ceeshell

Posted 21 February 2013 - 08:37 PM

QUOTE (Alacritous~Andy @ 21/02/2013, 09:26 PM) <{POST_SNAPBACK}>
I'm sure someone will correct me if I'm wrong, but I don't think you get refunded HECS repayments at tax time, even if you are under the threshold.


You do. I have HECS taken out of my pay and get it back at tax time because I don't earn over the threshold annually.

#11 OscarAndTilly

Posted 22 February 2013 - 02:28 PM

Yes it will get refunded at tax time if your annual income isn't over the threshold

#12 niggles

Posted 22 February 2013 - 02:31 PM

This has happened to me many times. Payroll look at how much you earn in that fortnight and withhold an amount of tax as if you earnt that much all year. Because you then don't end up in the higher bracket, you get a tax return.

#13 niggles

Posted 22 February 2013 - 02:32 PM

I'm not sure if I've explained that well. What I mean is even though you won't end up earning over $80k (if that's the next bracket), if you earnt the overtime amount every fortnight then you would end up in that bracket. So for that pay, they take out tax at the higher rate.

#14 Mimikyu

Posted 22 February 2013 - 02:40 PM

QUOTE (OscarAndTilly @ 22/02/2013, 03:28 PM) <{POST_SNAPBACK}>
Yes it will get refunded at tax time if your annual income isn't over the threshold


But if you do end up going over the threshold you will probably end up with a bill.

Something to be cautious of if you do a lot of overtime or are borderline on the threshold.

#15 PrincessPeach

Posted 22 February 2013 - 02:41 PM

With the HECS, the extra amount your employer takes out each week does not get paid off your HECS Debt.

It simply allows for the fact that your annual HECS repayment amount is calculated when you lodge your income tax return. The HECS payments are not made until you lodge that tax return.

As for the original problem, they amount they should be withholding should be similar to what is on the fortnightly tax tables, so to me, holding that much of your overtime sounds extreme. However if they have held too much, you will get it back when you lodge your tax return.

#16 Mimikyu

Posted 22 February 2013 - 02:53 PM

The threshold is $49,096 and if you go over that you pay 4% of your total earnings in hecs.

The PP is correct that it isn't paid until you do your return, it is just withheld to alloow for it, but when you are put over by overtime they (unless you have asked them to take out additional) wont normally have deducted enough through the year to cover the 4%.

Edited by WinterDancesHere, 22 February 2013 - 02:55 PM.





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