Child Support and the Protected Earnings Amount 

The Protected Earnings Amount (PEA) is the part of an employee’s or contractor’s wages that are exempt from child support deductions. The PEA doesn’t apply to garnishee notices requesting deductions under section 72A of the Child Support (Registration and Collection) Act 1988.

The PEA is adjusted on 1 January each year to allow for increases in the cost of living.

The following rate applies from 1 January 2017:

·         Weekly rate                 $358.05

·         Fortnightly                   $716.10 (weekly rate x 2)

·         Four week period        $1432.20 (weekly rate x 4)

·         Monthly period            $1556.88 (daily rate x 30.4375)

For child support purposes, a year is 365.25 days (allowing for the leap year). The number of days in a month is 30.4375, which is equal to 365.25 divided by 12.  Figures are rounded where applicable.

The daily rate (unrounded) is calculated by the weekly rate divided by 7 (that is, 358.05 / 7 = 51.15).

For more information:

·         Visit: https://www.humanservices.gov.au/business/enablers/protected-earnings-amount

·         Call the Australian Government Department of Human Services on 131 272

 

Tax Rules to Change for Temporary Working Holiday Makers

From 1 January 2017 working holiday makers will be taxed at 19% cent on earnings up to $37,000. Ordinary marginal tax rates will apply after that. They will no longer be entitled to claim the tax free threshold.

The Treasurer announced that this tax rate would be reduced from 19% to 15%.

Employers of working holiday makers will be required to undertake a simple, once-off registration with the Australian Taxation Office to be able to withhold tax at this new rate. Employers who do not register will be required to withhold tax at the 32.5% rate.

In addition, from 1 July 2017 the rate of tax on the Departing Australia Superannuation Payment (DASP) for working holiday makers will be increased to 6%.

These changes replace the 2015–16 Federal Budget measure in which the government proposed to change the tax residency rules for working holiday makers.

If you would like further information you can follow the link below:

https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-individuals/Tax-rules-to-change-for-temporary-working-holiday-makers/