Don’t let rising indexation on study and training loans catch you or your employees unaware.
Earn that ‘World’s greatest boss’ mug by informing and advising your employees of the following key points.
The compulsory repayment threshold for the 2022–23 financial year is $48,361. If you have employees with a study loan who earn more than this, they’ll be subject to a compulsory repayment. The ATO will include this when they lodge their tax return.
Top tips to help your employees are:
- Check if they’ve started studying or have a study loan you’re not aware of.
- Check their withholding amount. Is enough being withheld to cover their compulsory repayment? If not, you could discuss with the employee, an increase to the withholding amount to reduce their chances of getting a tax bill.
- Calculate the correct amount withheld. You can use the repayments calculator or visit the repayments, thresholds and rates webpage.
- Encourage them to make a voluntary repayment anytime. This will reduce their total loan amount, especially if they make the payment before indexation is applied, on 1 June.
- Advise them to check their loan balance. They can do this anytime by logging onto ATO online services via myGov. They can also find their payment reference number (PRN) and voluntary repayment options.
If their study or training loan balance is $0 by 1 June, indexation won’t apply. Tell them to allow a few business days for the payment to clear their bank and appear in their account.
You can find more information at Study and training support loans.
Have a question relating to the above, feel free to contact our office: (03) 8393 1000.
Source: ATO Newsroom