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Implementation of announced tax cuts

Last updated 7 October 2020

We anticipate the updated schedules will be ready next week and will be published at

Following this, employers will need to make adjustments in their payroll processes and systems in order for the tax cuts to be reflected in people’s take home pay. The complexity of implementing these adjustments may be different for each employer.

This means that some people may notice the tax cuts reflected in their take home pay within a few days or weeks, while for others it may be longer. Any ‘over-withholding’ that occurred prior to the employer updating their payroll software and processes will be included in the tax assessment of the employee at the end of the income year.

The ATO will work closely with providers of payroll software and employers to help ensure the reduced withholding associated with the threshold changes and the increase of the Low Income Tax Offset is reflected in software as soon as practicable.

The adjustments to the withholding schedules are designed to ensure that taxpayers have the correct amount of tax withheld from their pay going forward. It is not possible for the ATO to determine the extent of ‘over-withholding’ that may have occurred for each and every taxpayer as this is highly dependent on individual circumstances and will be different for everyone.

The ATO is committed to supporting employers and businesses through this change.

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