Flood Levy Tax Information Australia: How Much, When & How To Pay

The Queensland floods at the beginning of 2011 were a tragedy that greatly affected many hard working Australians. To help rebuild the flood damage in Queensland the federal government announced a flood levy titled: the Temporary Flood and Cyclone Reconstruction Levy.

Maybe we could impose a tax on income earned by politicians titled the Temporary Politician Reconstruction Levy to help counteract politicians consistently sapping money from ordinary Australians?

When do we have to pay the levy?

“The government has introduced a Temporary Flood and Cyclone Reconstruction Levy (flood levy) applying to taxable income for the 2011-12 year only.”[1]

What’s the levy supposed to do?

“It is designed to assist affected communities to recover from the recent natural disasters by providing additional funding to rebuild essential infrastructure - for example, roads, bridges and schools.”[1]

Who has to pay the flood levy?

“Individual taxpayers, who have a taxable income over $50,000 in the 2011-12 financial year will have to pay the flood levy. This includes foreign residents who have Australian income.

Low income earners will not pay the flood levy

As the flood levy only applies to taxable income you earn over $50,000, if you have a taxable income of $50,000 or less in the 2011-12 financial year, you will not be charged the flood levy.

Certain people affected by natural disasters will not pay the flood levy

Some people affected by natural disasters will be exempt from paying the flood levy regardless of whether their taxable income is under or over $50,000. There are special rules to work out who is exempt.”[1]

How much is this flood levy?

Here’s the tax table for the flood levy

Taxable income

Flood levy on this income

$0 to $50,000

Nil

$50,001 to $100,000

Half a cent for each $1 over $50,000

Over $100,000

$250 plus 1c for each $1 over $100,000

The tax rates work just like normal income tax where you’re taxed at a marginal rate.

Just to make things easy for you we've created a flood levy calculator you can use. You can also use our Income Tax Calculator which has the flood levy tax built-in.

How will the flood levy be taken from me?

The flood levy is administered by the ATO. It will take the flood levy from you in the same way it takes normal taxes from you.

For salary and wage earners the levy gets taken from your pay packet in addition to your normal PAYG withholding tax.

For PAYG instalment payers such as self-employed, investors and self-funded retirees the ATO will add the flood levy to the instalment amount you must pay. Check out our PAYG Instalment Guide to avoid costly mistakes for yourself and your business.

 

References & Sources Used

[1] ATO, 2011