Protected Earnings Amount (PEA) is the amount of an employee's salary or wage that are exempt from Child Support deductions. This is basically the amount that must be left after tax and Child Support deductions. And since the cost of living increases, this amount is indexed every year and new amounts take effect every 1 January. Note that this may also apply to contractors.
For 2014 weekly PEA for 2014 is $339.23. This is the amount that must be set aside for the employee after tax and Child Support is deducted. Below are some calculations depending on your payroll frequency: 1. Daily $339.23 ÷ 7 days = $ 48.4614 2. Weekly $48.4614 x 7 days = $339.23 3. Fortnightly $48.4614 x 14 days = $678.46 5. Monthly $48.4614 x 30.4375* = $1,475.04 *Note: a year is equal to 365.25 days (allowing for the leap year), 30.4375 days in a month is equal to 365.25 divided by 12. Figures are rounded where applicable. When making the full Child Support deduction that would take the employee's net pay under the PEA amount, the amount that you can deduct is only up to the amount that will leave the PEA. You do not make a deduction of Child Support that leaves an employee or with a take home pay (after tax and Child Support deductions) of less than the PEA. That is why it is called Protected Earnings Amount. For more information visit: http://www.humanservices.gov.au/ Comments are closed.
|
TipDon't waste another dollar on your accountant for information that is available online Archives
January 2016
Categories |