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June 14, 2019   |   Compliance

2019/20 Financial Year tax scales and thresholds

The 2019/20 Financial Year tax scales and thresholds were added to Definitiv at the end of May.

These new scales and thresholds, as discussed below, will come into effect when a pay run is created with a payment date on or after 1 July 2019.

Study & Training Loans

Making it easier to manage, from 1 July 2019, all study and training loans are covered by one set of thresholds and rates.

The new combined study and training loan repayment thresholds and rates will apply to the following;

  • Higher Education Loan Program (HELP)
  • VET Student Loan (VSL)
  • Student Financial Supplement Scheme (SFSS)
  • Student Start-up Loan (SSL)
  • ABSTUDY Student Start-up Loan (ABSTUDY SSL)
  • Trade Support Loan (TSL)

What are the repayment thresholds and rates for FY 2019/20?

Training thresholds and rates

Source: ATO Website

Maximum Superannuation Contributions Base

The Maximum Superannuation Contributions Base (MSCB) is the maximum earnings base per quarter that an employer is obligated to pay the superannuation guarantee on.

The MSCB increases from $54,030 per quarter in FY 2018/19 to $55,270 per quarter in FY 2019/20.

Therefore, using the 9.5% superannuation guarantee rate, the maximum employer superannuation contribution per quarter in FY 2019/20 is $5,250.65. If enabled by the company, Definitiv automatically caps employer contributions each quarter.

Redundancy Tax-Free Limit

Genuine redundancy and early retirement scheme payments are tax-free up to a limit based on the employee’s years of service.

The tax-free limit is: base amount + (service amount × years of service)

In FY 2018/19, the base amount for the first year of service was $10,399 and $5,200 for each additional year of completed service. The limits will increase to $10,638 and $5,320, respectively for FY 2019/20.

Employment Termination Payment Cap

An employment termination payment (ETP) is a lump sum payment made to an employee on termination. Once a termination payment exceeds the ETP, the top rate of tax will apply to the amounts exceeding the cap.

The ETP cap will increase from $205,000 to $210,000 in FY 2019/20.