If you leave your job, how will your tax/es be affected?

You may be wondering how your tax or taxes will be affected if you leave your job.

If you’ve decided to leave your job and are looking for another one, it’s important to understand how the ATO will treat your superannuation and taxes when you move on.

What are the things to put in consideration?

Your tax will be calculated based on your income and circumstances. If you leave your job, there are various ways to make sure that the ATO doesn’t charge you too much or too little tax.

You’ll need to work out whether you have a tax debt or overpayment, and how much extra money you will owe or be refunded by the ATO.

If you’re leaving your job and getting paid as usual, but with no pay for leave taken yet, then you can claim this as a deduction for the tax year in which it was earned. You can also claim any unclaimed leave payments from previous years on your tax return.

If you’re taking an early retirement package then your employer may have made deductions from your pay during the year.

These deductions can be claimed as a deduction from income on your tax return if they were paid under an approved superannuation scheme that provides benefits.

If not, they can’t be claimed as a deduction unless they’re specifically related to superannuation benefits payable under an approved super fund’s governing rules, in which case they may be included.

Income: What if I do or I don’t have an income for that year? Am I liable for tax?

If you leave your job and have not had any income for that year, then you are not liable for tax. If you have had income but it does not exceed the tax free threshold or if your employer has withheld enough money from your salary to cover any tax payable, then no further action is required.\

However, if your employer did not withhold enough money to cover your tax liability or if you have earned more than the tax free threshold then you will need to lodge a tax return with the ATO. You can do this online or over the phone by calling 13 28 61 (13 10 28). You can also reach out to us for help via the following:

Contact Us Via Our Website
Contact Us Via Email
03 5979 2671

Superannuation

If you’re leaving an employer, or retiring, you’ll probably be making some changes to your superannuation contributions and benefits. You might also be thinking about the best way to get access to your super savings.

If you have a choice of super funds and can move your account, check the fees charged by each fund. You may also want to consider whether it would be better to consolidate accounts with different providers into one account run by a single provider.

What are the tax/es that you may pay?

If you leave your job, you may have to pay taxes.

Payment Summary

Your employer will issue you with a payment summary. This document will show the amount of income tax and Medicare levy you paid during the financial year.

If your employer doesn’t issue this statement, or if the amount shown is incorrect by $50 or more, contact them immediately. If they won’t correct their mistake, you need to contact the ATO for steps that you need to take.

Final Tax Return

When leaving employment, you should submit your final tax return as soon as possible after 30 June (or before 30 September if you were overseas for more than three months). You may also need to lodge an amended tax return for any previous years that are open for assessment under normal circumstances .

Notice of Assessment

You may receive a Notice of Assessment or amended Notice of Assessment from the ATO before or after receiving your payment summary from your employer. Make sure that any additional tax payable is paid directly to the ATO, not your employer!

Takeaway

If you’re thinking of leaving your job soon, you’ll want to take a few factors into consideration before deciding on your course of action. By doing this, you’ll know exactly what to expect when it comes to both taxation and superannuation.

For more details about this, you can check the ATO website at www.ato.gov.au

Moreover, your best bet is likely to consult with a financial adviser that’s familiar with the ATO’s complex system.

You can reach out to us for help via the following:

www.profit1st.com.au
admin@profit1st.com.au
03 5979 2671