I was having a conversation with one of my staff the other day and I realised that for an outsider listening to us, it would have almost sounded like we were speaking another language. There are hundreds of acronyms used in the tax/accounting world and TFT stands for tax free threshold.
A bit of history – before iphones and social media the TFT was $5,400 and with the introduction of GST in 2000, the TFT rose to a massive $6,000 where it has remained until a few short months ago. The TFT is currently $18,200 – this means that you can earn up to $18,200 a year without paying any tax at all. While this effects part time or casual employees, the flow on effect to those earning higher than this amount is that the first $18,200 of your annual earnings is now tax free. This change is the reason you would have noticed a few extra $$$ in your pay since July.
Previously, if you had 2 casual jobs and ticked the box “Yes I want to claim the TFT” on more than 1 of the declarations there would have been potential dramas. Firstly – more often than not this would cause a tax issue and secondly, the ATO were quite specific that this was a big no no. However, they have changed their stance. You can now opt for more than one employer to claim the TFT. Please take my warning though – only go down this route if you are 100% sure you are not going to earn more than $18,200 during the year from all your jobs combined.
As always if you aren’t sure and want to double check, please feel free to give the office a call on 07 5576 0011.