Postponing Salary Payday

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  [Deactivated] on 07/06/2015 - 23:19

  +2

  Probably not legal. Main reason being is that you must be paid for the work you do within 2 weeks of doing it (in most cases).
  This is why you are paid 14 days in arrears, and balance of the month in advance.

  Professions such as real estate agents are exempt from this, and can be paid a month in arrears. Often companies that have a mixture of employees that can be paid a month in arrears and fortnight in arrears just standardise on the lower period.

  • 

    GnarlyKnuckles on 08/06/2015 - 03:13

    -1

    " Main reason being is that you must be paid for the work you do within 2 weeks of doing it …"

    Sheesh, that's news to me hombre. Sometimes I wait months to be paid by clients. And what regulation/law says that you must pay your employees within 2 weeks of them doing the work?

    • 

      MrHyde on 08/06/2015 - 07:56

      I'm interested in knowing that as well.

    • 

      [Deactivated] on 08/06/2015 - 09:22

      +4

      I presume your clients aren't paying you an actual wage, but instead paying you on invoice?
      So you're up shit creek hombre

      http://www.fairwork.gov.au/pay/paying-wages

      Pick your profession and it will show you if your award says you must be paid weekly, fortnightly or monthly.

  • 

    DealzEddy123 on 08/06/2015 - 08:18

    i get paid monthly lol

    i think it's probably just the way your company payroll has been setup.

    doiesnt make sense for them to change their process /policies just so you can avoid some tax

  • 

    meantolive on 08/06/2015 - 23:28

    Never knew that. Guess there is no way around this as my boss will not allow it if it's not legal. Hmm… maybe I can "volunteer" to work for the month of June. And they give me a bonus termination payout in July…

    • 

      [Deactivated] on 09/06/2015 - 06:54

      +1

      Unless they are a not for profit organisation, probably not legal either.

      Stop trying to dodge the tax man and pay for fair share.

      • 

        meantolive on 09/06/2015 - 09:02

        The reason how I even know this is possible because my previous employer made me pay more tax than I needed 2 years back.
        Back then, I did not maximise my tax free threshold because he paid my June salary in July! (I only started work in May)
        If he paid my June Salary in June, I would not have paid any tax on it.

        You may call it a lame excuse to do something like what I'm doing. But I feel as though I'm "claiming" it back

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  mskeggs on 07/06/2015 - 23:22

  Consider also any leave that you have accrued, that will be paid out on your leaving date.
  All other things aside, it would be wise to set your final work day as 1st July or later.
  As to whether you can perform your scheme, it sounds a little dodgy, but if you had the agreement from your employer to schedule your work and be paid for it in July, it is above board, I think. After all, if you happened to be paid quarterly, for example, there would be no question.
  And remember the financial year is until the 30th of June - you don't have to stay on the books to August, July is enough. The key thing will be what your group certificate says (I am old fashioned, it is called a PAYG payment summary these days).
  There is also a thing when you file your tax return if you are filing for the last time (because you are leaving forever) which is just a box you tick.
  If you are leaving for good, I think this lets them know not to expect a 15/16 return as you will be non-resident.
  Of course, if plans change and you return n a year or so, you will no doubt file as you need to on your return, but it might make it clearer that you were non-resident for that period so they aren't asking you for returns for parts of the year.

  A somewhat similar thing happened to me, where I had some lump some pay outs that occurred with such timing that I wasn't an AU resident in the applicable tax year. I did have the hardship of not working for a couple of months so I didn't accidentally become a resident by being employed here for more than the, I think, 180 days.
  There may be some other date shifting you could do that would work in your favour. For example, if you are eligible for superannuation co-contributions, or wish to take advantage of extra super contributions.

  Bear in mind you will have tax obligations in your new residency as well. In some jurisdictions you will have Australian tax paid counted against your tax bill there, but some won't. So understand what the new country arrangements are too, to make sure you don't accidentally create a larger liability in the new country.
  And it gets murkier if the residency years don't align.
  In my case I mentioned earlier, I was able to avoid residency elsewhere as well as in Australia because the country I was leaving had an April financial year end, so I happened to be a non-resident of both places for that year.

  In any case, keep good records, so if you are ever audited you are able to defend the judgements you made.

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  retiredfeline on 08/06/2015 - 00:37

  It all depends on which FY's PAYG Payment Summary that pay will land up on. If your employer says they can work out a legal way to put your pay on the 15/16 PAYG PS, you're good. So talk to them.

  • 

    meantolive on 08/06/2015 - 23:30

    Yea I already have spoken to my boss. He told me to find a legal way to do it. Hence I'm here seeking advice/ideas. haha

    • 

      retiredfeline on 08/06/2015 - 23:48

      Maybe you can do one last piece of work for them in July?

      • 

        meantolive on 08/06/2015 - 23:52

        I will actually still be employed in July. My termination date will depend on my replacement that should be coming in Mid-End July.

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  BrisbaneBargainer on 08/06/2015 - 01:46

  The tax free treshold is only applicable to Australian Residents for Tax Purposes who have lived in the country for more than 181 days of the current financial year. In other words, if you get paid in July along with any leave that you may have accrued you will be taxable on the entire amount on the highest tax slab. So your trick could backfire. You can double check anyway. Call the ATO and check. Maybe it would be better to encash your leave in this financial year itself.

  • 

    retiredfeline on 08/06/2015 - 01:55

    Backpackers get to claim some prorata back. This is one of the things the government was proposing to strip.

  • 

    retiredfeline on 08/06/2015 - 08:53

    Also OP didn't say whether he was a backpacker or not. He might in fact be an Australian resident for tax purposes and that depends not on merely 181 days residency but on "economic connection". For that tax year his entire worldwide income is taxable. He might be moving to a low wage country for the rest of the year. So it all depends. More data is needed.

  • 

    meantolive on 08/06/2015 - 23:37

    Just to clarify, I am currently a Permanent Resident and not a backpacker.
    I've also researched that I will be entitled to the Tax Free Threshold of at least $13,464 which is more than enough for me Link to ATO

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  MrHyde on 08/06/2015 - 07:55

  +5

  I don't think that will work. Your employer will take on huge OH&S liability as well. What would happen if you get injured while on your supposed time off work for leave without pay. Would you still be covered by WorkCover? What would happen if you get injured while supposedly still working for your employer in August? Is your employer liable for any WorkCover claims in that period?

  • 

    meantolive on 08/06/2015 - 23:43

    Thanks for pointing this out MrHyde. I'm not very knowledgeable in OH&S so please forgive me on my ignorance.

    I'm thinking, I sit at my desk 99% of the time and my only "injury" I sustained while working since I started was a papercut (lol). Unless of course, WorkCover covers employees out of work as well?

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  spal on 08/06/2015 - 08:02

  The tax free threshold is calculated based on number of days you are in Australia. So if you leave on 1 July you will get a prorata threshold based on number of days. There is a tax calculator on ATO website have a play with the numbers on it. Also leave salary maybe subject to a different withholding regime if it is considered leave salary on termination.

  • 

    meantolive on 08/06/2015 - 23:47

    The tax free threshold is calculated based on number of days you are in Australia

    This is true. But apparently, you get a minimum of $13,464 and the remaining $4,736 will then be pro-rated. See this link

    I'll need to take a look at the leave salary payout on termination. Thanks for pointing that out.

    • 

      RockyRaccoon on 09/06/2015 - 00:39

      See my post below about working overseas, and being taxed on that income. You may find that when you add that in it will take you over this threshold so your strategy maybe sunk, unless you dont earn much while OS. You need to do more research.

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  RockyRaccoon on 08/06/2015 - 08:11

  I am planning to leave Australia at the end of July and work in another country for a year or so.

  Tax laws change so i might be out of date, so do some checking with someone qualified.

  In the past the ATO would see your OS income as part of your Australian Tax liability with allowance for any tax paid overseas. You really will need to be away for longer than 1 year. Again I dont know how much longer as much of this would be determined by appeals in the past etc and whether or not you show no residential ties to Australia eg Bank accounts that list you as overseas (with tax withheld etc)

  So your strategy may fail based on this.

  From this site, while not exactly your situation, it covers the residency issue you will face.

  http://www.exfin.com/australian-tax-faqs

  Q : I am an Australian citizen who has lived outside the country completely for the last five years, in Canada and the US. I have been filing tax returns in my country of residence but have not filed a tax return in Australia since I left. I am now returning to Australia at the end of the year and plan to live and work there for a while. What do I do about declaring worldwide income for the time I've been away.

  A: As you have been away for more than 2 years and established a home overseas you will probably be regarded as a non resident of Australia. If considered non-resident for the time you were away you would not be taxed on your overseas employment income in Australia. Bank interest or dividends earned in Australia should be automatically subject to withholding tax, on the premise you have advised your bank or share registrar that you were living overseas, whilst you need to submit an Australian tax return in any year in which you earn rental income. If your property is negatively geared (i.e. producing a tax loss) this may be to your benefit in any event. You should seek advice from a professional tax adviser regarding your residency status – or you may submit an inquiry through this website and professional advice will be arranged.

  • 

    meantolive on 09/06/2015 - 11:38

    I've actually did a test to see if you're an Australian Resident for Tax Purposes. My results showed "You are not an Australian resident for taxation purposes following your departure from Australia."

    So if I'm not wrong the salary I earn overseas will not be taxed by Australia.