Flood Levy – Frequently Asked Questions
The past year has seen some of the worst natural disasters to affect Australia in many years. Floods in Queensland and Victoria have left many people and areas affected and rebuilding costs are expected to reach into billions of dollars.
To assist with the rebuilding these areas and providing help to people affected, the Australian Government has imposed a small additional levy for the upcoming 2011-2012 year. This levy only applies to certain people and can reach up to 1% of taxable income.
But what does it mean to you?
Do I have to pay the flood levy?
That depends. The flood levy is only payable if your taxable income is above $50,000 for the 2011-12 financial year. This is based on your individual income, so your spouse/partner’s income is not included. It is possible that one partner will pay the levy and one won’t.
Are there any exemptions?
Yes. If your income is above $50,000 there is still an exemption that might apply to you. There are three exemption classes that apply to people who were affected by the floods. The Australian Tax Office is attempting to notify all those people who are exempt, but if you’d like to be sure, please either contact us or see more detail at the ATO website.
I am exempt. What do I need to do now?
If you are on a wage, you can ask your employer to reduce the amount of tax being deducted from your income that would otherwise be used to pay the levy. You will need to complete a form and give it to your employer.
If you are not on a wage (for instance you are a sub-contractor) and the ATO has identified you as being exempt, they will automatically reduce the amount of any PAYG instalment you have to pay. If they haven’t, we can do this for you. This can be a bit complicated, so we advise that you contact us so we can assist.
The ATO website has a lot more detail on this if you are exempt.
And of course, you don’t have to reduce the amount of tax being deducted through the year. It will simply mean you will either receive a larger refund or a small tax bill at the end of the year.
I’m not exempt. How much is it?
The flood levy is only applied to taxable incomes of over $50,000. If your income is over $50,000, you will need to pay the following:
| Taxable income | Flood levy on this income |
| $0 to $50,000 | Nil |
| $50,001 to $100,000 | Half a cent for each $1 over $50,000 |
| Over $100,000 | $250 plus 1c for each $1 over $100,000 |
The ATO has developed an online calculator to help you work this out and give you a weekly amount, which is excellent if your employer does not automatically deduct tax for you or you are self employed.
I still have a question. Who can I ask?
The flood levy can be complicated, and only lasts for one year. If you have any additional questions, please contact us or check out the ATO’s flood levy webpages.
Photo Credit: MartinHoward via Flickr
This entry was posted on Friday, August 5th, 2011 at 2:57 pm and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.