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  1. #1
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    Default Tax on paid parental leave

    I just got my first payment of ppl from my employer for 7 weeks as it was back paid and got taxed $200 a week! So I paid 1400 in tax. When I questioned it my work said it was high as the lump sum being larger got taxed at a higher rate and next week tax will only be around $57.
    Do I get this money back at tax time?

    Thank you

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    Default Tax on paid parental leave

    You should have been taxed at the appropriate weekly rate - they should not have taken out more for lump sum. Check whether this is something that your employer did or if this came through centrelink. I would be giving them a call.

    Good luck

  3. #3
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    That happens with my work too with lump sums, including my paid parental leave. In tax time they'll just work out over the space of the year how much tax you owe based on your yearly earnings (minus deductions etc) so as long as you don't owe any tax for any other reason, you should get the overpayment back.

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    Default Tax on paid parental leave

    I'm worried this will happen to me too if for any reason there is a delay in paying it, as the guy who looks after my payroll hates me and will do whatever he can to make my life difficult (finance vs HR, long story lol). I wonder if u put it in writing that you only want to be taxed the minimal amount if they'll do it or if the tax law doesn't allow for that... I know the reason for it, they have to work out your tax for each pay period as if that was your earnings for the whole year, so eg if you earned $1,000 a month they'd put you in the tax bracket that has an annual income of $12,000, but say you got paid a massive bonus plus some back pay and whatever and got paid $10,000 that month, then you'd be taxed in the 120,000 tax bracket for that month. It's annoying that you get taxed so highly if you do get paid a bit extra in some pays (bonus time is depressing when almost half my bonus goes to tax!) but you should get some of it back at tax time.

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    Default Tax on paid parental leave

    If its paid as a lump sum and that puts you in a higher tax bracket (hypothetically when that amount is annualised) then you'll pay more tax. Doesn't sound like your employer did anything wrong but you can always check with them to be sure.

    Any overpayment in tax is sorted out at the end of the financial year.

  6. #6
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    Sounds normal, same thing happened to me. I got the extra tax back at tax time.

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    Unfortunately this is normal. The employer hasn't done anything wrong, the payroll systems automatically do this. I figured I would rather over pay than under pay then get a refund at tax time.

    If you really want or need the money you can request in writing to the employer to alter the tax to x amount.

    Remember though if you are taking any annual leave accrued this will impact how much tax you need to pay.


 

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