If you’re a sole trader or small business who pays wages to an employee, you’re required to withhold income tax from their payments on their behalf.
Calculating how much tax to withhold can be tricky, which is why the ATO is quite prescriptive about it – they have weekly, fortnightly and monthly tax tables on their website, taking the guesswork out of the Pay As You Go (PAYG) tax system.
But really, at the end of the day, what you’re looking for is an electronic payroll software that automatically does the tax calculations for you – including things like Medicare levy, Superannuation Contribution Guarantee, student loan repayments etc etc.
And if you’re looking for someone to do all that for you, Hnry has your back.
The ATO fortnightly tax table 2024
There have been some major updates since the 2023/24 financial year. For starters the stage three tax cuts have come into effect, meaning that the amount of tax you’re required to withhold from PAYG payments has changed.
The ATO is the best source of truth for exactly how much tax you’re now required to withhold. You can find their fortnightly tax table for payments made after 1 July 2024 here on their website.
This page includes a step-by-step process to make sure you’re taking into account all tax considerations, including the Medicare levy, any student loan repayments, and any tax offsets your employee might be eligible for.
The ATO weekly tax table 2024
After the same thing, but pay your employees weekly? Don’t worry, the ATO still has your back. You can find their weekly tax table here on their website.
The ATO monthly tax table 2024
… and if you need the monthly version, they have that too. Voila!
Does paying employees fortnightly save them in tax?
If you’re wondering whether or not you can save employees in tax payments by paying them weekly instead of fortnightly, or vice versa, the short answer is no.
There may be some years where paying employees fortnightly results in 26 pay cycles, rather than 27. Withholding the same amount of tax in both cases means you’ll withhold slightly less overall in years with 26 pay cycles.
But this doesn’t mean your employees owe less tax – it simply means you haven’t withheld enough. No matter how many times employees are paid, they’ll still owe the same amount of tax on the same amount of income each financial year.
Payroll software
If you’re tired of doing this all manually, you can speed up the process by using payroll software.
Basically, with payroll software, you input all the necessary information, and it will do all the tax calculations for you. It’s likely to be faster and more accurate than you would be if you do it all by hand, and usually for a reasonable price!
While we hesitate to give you any recommendations since that’s not what we’re about, a quick google search will turn up more than a few options. You can pick one based on your own needs and situations, and say goodbye to tax tables forever. Easy!
💡 Note: in certain cases, you may be required to use payroll software that’s Single Touch Payroll enabled. For more information, visit the ATO website.
Hnry sorts your tax
Helping sole traders sort their own tax is what we’re actually about. If you’re tired of manually doing your own taxes, Hnry has you covered.
Hnry is an award-winning accounting service specifically designed for sole traders. For just 1% +GST of your sole trader income, capped at $1,500 +GST, we will automatically calculate, deduct, and pay your:
We also lodge your tax return every year, all as part of the service. Oh, and we chase-up late paying clients on your behalf. And we review and claim your expenses for you, so you get all the tax-savings you’re entitled to in real time.
Basically, we make it so that you never have to think about taxes again.
Save time, save money, join Hnry today.
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