Worried you’re missing part of your refund? Remember, the low and middle income tax offset isn’t a refund on its own – it’s used to offset (or reduce) the amount of tax you pay. The offset amount you may be entitled to is automatically applied and could range between $255-$1080, depending on things like your taxable income and how much tax you’ve paid.
I've just started a new company that provides IT services, with myself being the PAYG employee of that company.
All revenue will be PSI.
As I understand, the rules around PSI and companies is that the PSI revenue has to be paid and attributed to the PAYG employee who generated that revenue. How does that factor in legitimate deductions?
- Company earns $200k in PSI income
- Legitimate deductions incurred are $5k, but these are not known in advance
Given this scenario, I pay $195k in remuneration to the PAYG employee over the year.
But what happens if deductions at the end of the year does not equal $5k.
If its under, I have excess cash in the company and have not paid/attributed the PAYG employee enough?
If it's over, I have a cash deficit, and have paid/attributed the PAYG employee too much?
Is the answer - the PAYG amount paid to the employee varies each pay period depending on what deductions/expenses and revenue comes through?
This might be more of a 'mechanics' question than a tax question, but I'm confused.