Trader wrote:Doc and Amber are correct.
Cyril won't get the full $1200 back.
Yes, $1200 is the extra tax he paid, however he also had extra income this year (he's now worked 52 weeks plus been paid for a bonus 2 weeks of annual leave cashed in), so Cyril is understanding there is clearly some extra tax to be paid.
The numbers in Cyril's example have been rounded, so its hard to pin point exactly where the income sits, but assuming Cyril earns around the $70,000 mark normally, cashing in 2 weeks annual leave wont push him from the 32.5c bracket to the 37c bracket (which kicks in at 90k pa), as such, on the extra $3k he earns that year, he'll pay in the 32c bracket, so he'll get back 16c per dollar, not the full 48c per dollar.
Round numbers, he'll get back 1/3 of the extra tax withheld in that pay period.
NB: The above does not take into account things like the medicare levy. Cyril should seek independent financial advice rather than relying on internet forum nupties like us!
The Doc and Amber show.
Has a good ring too it!