Remember the flood levy…

For the coming financial year (and only that year we are told), a flood levy will apply to many Australians. The levy is to help rebuild the infrastructure for the communities hurt in the floods, fires and Yassi earlier this year.

Everyone with a taxable income over $50,000 will pay the levy – unless you are exempt because you are receiving a Government Disaster Recovery Payment for a 2010-11 natural disaster. You can find out how much the levy will be for you on the Treasury’s flood rebuilding site.

If you are self-employed, you probably pay tax via the PAYG system rather than regular deductions from your pay. Your annual letter outlining your PAYG instalments for the year will include the levy in those calculations. If you are an employee then your employer will deduct the levy along with your normal tax. You need to inform your employer or the ATO if you are exempt but earning over the threshold.

If you also employ people, you will need to add the levy to your usual deduction schedule. That is, for employees earning over $50,000, you will need to deduct an extra 0.5% or 1.0% with their tax – starting with the first pay after 1 July 2011. Businesses do not pay the levy, it is only for individuals.

So are you prepared for this levy? CE2DTMFHHKHT