Taxation Administration Act Withholding Schedules 2016 (Cth)

Legislative Instrument

TAXATION ADMINISTRATION ACT
WITHHOLDING SCHEDULES 2016

I, Steve Vesperman, Deputy Commissioner of Taxation, make this determination under section 15-25 of Schedule 1 to the Taxation Administration Act 1953.

Steve Vesperman
Deputy Commissioner of Taxation
13 June 2016

Name of instrument
This determination is the Taxation Administration Act Withholding Schedules 2016.
Commencement
This instrument commences on 1 July 2016.
Repealing of existing instrument
This instrument repeals legislative instrument Taxation Administration Act Withholding Schedules 2015 – F2015L00944, registered on 25 June 2015.
Purpose
(a) Withholding schedules specify the formulas and procedures to be used for working out the amount to be withheld by an entity from a withholding payment covered by Subdivision 12-B, 12-C or 12-D of Schedule 1 to the Taxation Administration Act 1953.
(b) The withholding schedules in this instrument are made for the purposes of collecting income tax, Medicare levy, Temporary Budget Repair levy and amounts of liabilities to the Commonwealth under the Higher Education Support Act 2003, the Trade Support Loans Act 2014, the Social Security Act 1991 and the Student Assistance Act 1973.

Withholding schedules
Each of the withholding schedules listed in the following table, has effect from the date of commencement of this instrument:

Schedule number Quick code number Title

1 45521 Statement of formulas for calculating amounts to be withheld

2 45522 Tax table for individuals employed in the horticultural or shearing industry

3 45523 Tax table for actors, variety artists and other entertainers

5 45524 Tax table for back payments, commissions, bonuses and similar payments

6 45525 Tax table for annuities

7 46069 Tax table for unused leave payments on termination of employment

8 48738 Statement of formulas for calculating HELP, SSL, TSL and SFSS components

9 45527 Tax table for seniors and pensioners

11 48968 Tax table for employment termination payments

12 48969 Tax table for superannuation lump sums

13 48970 Tax table for superannuation income streams

Schedule 1 – Statement of formulas for calculating amounts to be withheld

For payments made on or after 1 July 2015

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by Subdivisions 12-B (except sections 12-50 and 12-55), and 12-D of Schedule 1 to the TAA.

Using this schedule

If you develop your own payroll software package, this schedule provides the formulas that you will need to calculate the amounts to be withheld from payments made on a weekly, fortnightly, monthly or quarterly basis.

To assist employers who do not have a payroll software package our website makes available:

■a tax withheld calculator, and
■tax tables

which are based on the formulas in this schedule.

Payments covered include:

■salary, wages, allowances and leave loading paid to employees
■paid parental leave
■directors’ fees
■salary and allowances paid to office holders (including members of parliament, statutory office holders, defence force members and police officers)
■payments to labour hire workers
■payments to religious practitioners
■government pensions
■government education or training payments
■compensation, sickness or accident payments that are calculated at a periodical rate and made because a person is unable to work (unless the payment is made under an insurance policy to the policy owner).

Get it done

You can download a printable version of Statement of formulas for calculating amounts to be withheld (NAT 1004, 586KB) in Portable Document Format (PDF).

Coefficients for calculation of amounts to be withheld (withholding amounts) from weekly payments

Where the tax-free threshold is not claimed in Tax file number declaration – Scale 1

Weekly earnings (x) less than $	a	b
45	0.1900	0.1900
361	0.2321	1.8961
932	0.3477	43.6900
1,188	0.3450	41.1734
3,111	0.3900	94.6542
3,111 & over	0.4900	405.8080

Where the employee claimed the tax-free threshold in Tax file number declaration – Scale 2

Weekly earnings (x) less than $	a	b
355	-	-
395	0.1900	67.4635
493	0.2900	106.9673
711	0.2100	67.4642
1,282	0.3477	165.4431
1,538	0.3450	161.9815
3,461	0.3900	231.2123
3,461 & over	0.4900	577.3662

Foreign residents –Scale 3

Weekly earnings (x) less than $	a	b
1,538	0.3250	0.3250
3,461	0.3700	69.2308
3,461 & over	0.4700	415.3846

Where a tax file number (TFN) was not provided by employee –Scale 4

Earnings	Tax rate
Resident $1 & over	0.4900
Foreign resident $1 & over	0.4700

Where the employee claimed the FULL exemption from Medicare levy in Medicare levy variation declaration –Scale 5

Weekly earnings (x) less than $	a	b
355	-	-
711	0.1900	67.4635
1,282	0.3277	165.4423
1,538	0.3250	161.9808
3,461	0.3700	231.2115
3,461 & over	0.4700	577.3654

Where the employee claimed the HALF exemption from Medicare levy in Medicare levy variation declaration –Scale 6

Weekly earnings (x) less than $	a	b
355	-	-
660	0.1900	67.4635
711	0.2400	100.5087
826	0.3777	198.4875
1,282	0.3377	165.4429
1,538	0.3350	161.9813
3,461	0.3800	231.2121
3,461 & over	0.4800	577.3660

Notes

If you have 27 fortnightly, or 53 weekly pays in a financial year, refer to withholding additional amounts from employee earnings.
Scales 1, 2, 3, 5 and 6 may be applied only where employees have provided their TFN.
For scale 4 no coefficients are necessary. To calculate withholding, apply the tax rate to earnings, ignoring any cents in earnings and in the withholding result.
Scale 1 and 2 apply whether or not the employee is entitled to any leave loading.
Tax offsets may be allowed only where scales 2, 5 or 6 are applied.
All scales include the Temporary Budget Repair Levy.
Scale 1, 2, 4 and 6 incorporate the Medicare levy. Scale 4 incorporates the Medicare levy for residents only.
For scale 2 no Medicare levy is payable by a person whose taxable income for the year is $20,542 ($395 per week) or less. Where the taxable income exceeds $20,542 but is less than $25,677 ($493 per week), the levy is shaded in at the rate of 10% of the excess over $20,542. Where a person’s taxable income is $25,677 ($493 per week) or more, Medicare is levied at the rate of 2% of total taxable income.
The Medicare levy is also shaded in for scale 6. The Medicare levy parameters for scales 2 and 6 are as follows:

Medicare levy parameters

Scale 2	Scale 6
Weekly earnings threshold	395	660
Weekly earnings shade-in threshold	493	826
Medicare levy family threshold	34,367	34,367
Weekly family threshold divisor	52	52
Additional child	3,156	3,156
Shading out point multiplier	0.1000	0.0500
Shading out point divisor	0.0800	0.0400
Weekly levy adjustment factor	395.0400	660.9000
Medicare levy	0.0200	0.0100

About this schedule

Amounts to be withheld from payments made weekly, fortnightly, monthly and quarterly, as set out in the relevant PAYG withholding tax table, can be calculated using the formulas and coefficients contained in this schedule.

Separate formulas apply to:

■employees who have not claimed the tax-free threshold
■foreign residents
■employees claiming a full exemption from Medicare levy
■employees claiming a half exemption from Medicare levy
■employees who have claimed the tax-free threshold.

Find out more

■Tax file number (TFN) declarations
■Withholding declarations
■Allowances
■Holiday pay, long service leave and employment termination payments
■Claiming tax offsets
■Medicare levy adjustment

Using a formula

The formulas comprise linear equations of the form y = ax – b, where:

■y is the weekly withholding amount expressed in dollars
■x is the number of whole dollars in the weekly earnings plus 99 cents

a and b are the values of the coefficients for each set of formulas for each range of weekly earnings (or, in the case of fortnightly, monthly or quarterly earnings, the weekly equivalent of these amounts).

The formulas relate only to the calculation of withholding amounts before any tax offsets and Medicare levy adjustments are allowed. For instructions on the treatment of tax offsets and Medicare levy adjustments, refer to Tax offsets and Medicare levy adjustments.

For sample data to verify that the software program is calculating the correct withholding amounts and Medicare levy adjustments, see Withholding amounts and Medicare levy adjustments.

Withholding amounts calculated using these formulas may vary slightly to those calculated using the method set out in the footnote to the appropriate PAYG withholding tax table. This applies if earnings exceed $3,275 weekly or $6,550 fortnightly.

Rounding of withholding amounts

Withholding amounts calculated as a result of applying the above formulas are rounded to the nearest dollar. Values ending in 50 cents are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Use these rounding rules across all scales except scale 4 (where employee does not provide a TFN). For scale 4, cents are ignored when applying the tax rate to earnings and when withholding amounts are calculated.

When there are 53 pays in a financial year

In some years, you may have 53 pays instead of the usual 52. As this schedule is based on 52 pays, the extra pay may result in insufficient amounts being withheld. You should let your employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amount in the table below.

Weekly earnings $	Additional withholding $
725 to 1,524	3
1,525 to 3,449	4
3,450 and over	10

When there are 27 pays in a financial year

In some years, you may have 27 pays instead of the usual 26. As this schedule is based on 26 pays, the extra pay may result in insufficient amounts being withheld. You should let employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amounts in the table below.

Fortnightly earnings $	Additional withholding $
1,400 to 3,049	12
3,050 to 6,799	17
6,800 and over	42

Working out the weekly earnings

The method of working out the weekly earnings (x) for the purpose of applying the formulas is as follows:

Example

Weekly income $367.59

Add allowance subject to withholding $ 9.50

Total earnings (ignore cents) $377.00

Add 99 cents $0.99

Weekly earnings $377.99

Calculating withholding fortnightly, monthly or quarterly amounts

First calculate the weekly equivalent of fortnightly, monthly or quarterly earnings. If you pay:

■fortnightly – divide the sum of the fortnightly earnings and the amount of any allowances subject to withholding by two. Ignore any cents in the result and then add 99 cents.
■monthly – obtain the sum of the monthly earnings and the amount of any allowances subject to withholding (if the result is an amount ending in 33 cents, add one cent), multiply this amount by three and then divide by 13. Ignore any cents in the result and then add 99 cents.
■quarterly – divide the sum of the quarterly earnings and the amount of any allowances subject to withholding by 13. Ignore any cents in the result and then add 99 cents.

Then calculate fortnightly, monthly or quarterly withholding amounts as follows:

■fortnightly – work out the rounded weekly withholding amount applicable to the weekly equivalent of earnings, before any adjustment for tax offsets. Multiply this amount by two.
■monthly – work out the rounded weekly withholding amount applicable to the weekly equivalent of earnings, before any adjustment for tax offsets. Multiply this amount by 13, divide the product by three and round the result to the nearest dollar.
■quarterly – work out the rounded weekly withholding amount applicable to the weekly equivalent of earnings, before any adjustment for tax offsets. Multiply this amount by 13.

Tax offsets

The withholding amount calculated using scales 2, 5 or 6 of the formulas is reduced as follows:

■weekly – 1.9% of the total amount claimed at the tax offsets questions on the Withholding declaration (NAT 3093), rounded to the nearest dollar
■fortnightly – 3.8% of the total amount claimed at the tax offsets questions on the Withholding declaration, rounded to the nearest dollar
■monthly – 8.3% of the total amount claimed at the tax offsets questions on the Withholding declaration, rounded to the nearest dollar
■quarterly – 25% of the total amount claimed at the tax offsets questions on the Withholding declaration, rounded to the nearest dollar.

Medicare levy adjustment

A Medicare levy adjustment is not allowed where withholding amounts have been calculated using scales 1, 3, 4 or 5. The amount obtained using scales 2 or 6 (after allowing for any tax offsets) is reduced by any amount of Medicare levy adjustment applicable.

When an employee is entitled to an adjustment

An employee who has lodged both a completed Withholding declaration and a Medicare levy variation declaration (NAT 0929), may be entitled to a Medicare levy adjustment if they have weekly earnings of one of the following:

■$395 or more where scale 2 is applied
■$660 or more where scale 6 is applied.

To claim the adjustment, the employee must answer yes to question 10 and yes to question 9, and/or question 12 on the Medicare levy variation declaration.

Calculating the Medicare levy adjustment

To calculate the Medicare levy adjustment, your software package will need to be able to distinguish those employees who have answered yes to question 9 and no to question 12 on the Medicare levy variation declaration.

Where employees have answered yes to question 12, the software must be able to store the number of dependants shown at this question on the declaration.

You will need to calculate the weekly family threshold and shading out point (SOP) before calculating the weekly levy adjustment for employees with weekly earnings of one of the following:

■$493 or more where scale 2 is applied
■$826 or more where scale 6 is applied.
Values used in the calculations may be regarded as variables.

Weekly family threshold (WFT)

Where scale 2 or scale 6 is applied

■Where an employee has answered yes to question 9 and no to question 12 on the Medicare levy variation declaration:
–WFT = $660.90 (34,367 ÷ 52) (rounded to the nearest cent).

■Where an employee has answered yes to question 12 on the Medicare levy variation declaration, you need to:
a.   multiply the number of children shown at question 12 by 3,156 and add the result to 34,367
b.   divide the result of (a) by 52
c.   round the result of (b) to the nearest cent.

Example

If the employee has shown two dependent children at question 12:

WFT = ([3,156 × 2] + 34,367) ÷ 52

WFT = 782.2885 or $782.29 (rounded to the nearest cent)

Shading Out Point (SOP)

The SOP relative to an employee’s WFT is calculated as follows:

Multiply WFT by 0.1 and divide the result by 0.0800. Ignore any cents in the result.

Example

Employee has shown six dependent children at question 12 and scale 2 is applied:

WFT = ([3,156 × 6] + 34,367) ÷ 52

WFT = 1,025.0577 or $1,025.06 (rounded to the nearest cent)

SOP = (WFT × 0.1) ÷ 0.0800

SOP = ($1,025.06 × 0.1) ÷ 0.0800

SOP = 1,281.3250 or $1,281 (ignoring cents)

Weekly Levy Adjustment (WLA)

Where scale 2 is applied

Where weekly earnings are $395 or more but less than the SOP, the WLA is derived by applying the weekly earnings (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly earnings), in the following formulas:

If x is less than $493, WLA = (x – 395.04) × 0.1
If x is $493 or more but less than WFT, WLA = x × 0.0200
If x is equal to or greater than WFT and less than the SOP, WLA =
(WFT × 0.0200) – ([x – WFT] × 0.0800)

Where scale 6 is applied

Where weekly earnings are $660 or more but less than the SOP, the WLA is derived by applying the weekly earnings (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly earnings), in the following formulas:

If x is less than $826, WLA = (x – 660.90) × 0.05
If x is $826 or more but less than WFT, WLA = x × 0.0100
If x is equal to or greater than WFT and less than the SOP, WLA =
(WFT 0.0100) – ([x – WFT] × 0.0400)

In each case WLA should be rounded to the nearest dollar.

Values ending in 50 cents should be rounded to the next higher dollar.

Examples

Example 1

Employee’s weekly earnings are $405.33 and scale 2 is applied.

x = 405.99

As x is less than $493, WLA is calculated using formula (1):

WLA = (405.99 – 395.04) × 0.1
= 1.0950 or $1.00 (rounded to the nearest dollar).

Example 2

Employee's weekly earnings are $835.47 and the number of children claimed at question 12 is three. Scale 6 is applied.

= 835.99
WFT = ([3,156 × 3] + 34,367) ÷ 52
= 842.9808 or $842.98 (rounded to the nearest cent)

As x is greater than $826 and less than WFT, WLA is calculated using formula (2):

WLA = 835.99 × 0.01
= 8.3599 or $8.00 (rounded to the nearest dollar).

Example 3

Employee’s weekly earnings are $982.29 and the number of children claimed at question 12 is four. Scale 2 is applied.

x = 982.99
WFT = ([3,156 × 4] + 34,367) ÷ 52
= 903.6731 or $903.67 (rounded to the nearest cent).

SOP = (903.67 × 0.1) ÷ 0.08
= 1,129.5875 or $1,129 (ignoring cents).

As x is greater than WFT and less than SOP, WLA is calculated using formula (3):

WLA = (903.67 × 0.020) – ([982.99 – 903.67] × 0.0800)
= 11.7278 or $12.00 (rounded to the nearest dollar)

Fortnightly levy adjustment

Multiply rounded weekly levy adjustment by two.

Example

Employee’s fortnightly earnings are $1,495.52 and the number of children claimed at question 12 is one. Scale 2 is applied.

Equivalent weekly earnings = $1,495.52 ÷ 2

= $747.76

x = 747.99

WFT = (3,156 × 1] +34,367) ÷ 52

= 721.5962 or $721.60 (rounded to the nearest cent).

SOP = (721.60 × 0.1) ÷ 0.08

= 902.0000 or $902 (ignoring cents).

As x is greater than WFT and less than SOP, formula (3) is used:

WLA = (721.60× 0.020) – ([747.99 –721.60] × 0.0800)

= 12.3208 or $12.00 (rounded to the nearest dollar).

The fortnightly levy adjustment is therefore $24.00 ($12.00 x 2)

Monthly levy adjustment

Multiply rounded weekly levy adjustment by 13 and divide the result by three. The result should be rounded to the nearest dollar.

Example

Employee’s monthly earnings are $2,800.33 and has a spouse but no children. Scale 2 is applied.

Equivalent weekly earnings = ($2,800.33 + 0.01) × 3 ÷ 13

= $646.23

x = 646.99

WFT = $660.90

As x is greater than $493 and less than WFT, formula (2) applies:

WLA = 646.99 × 0.0200 = 12.9398 or $13.00 (rounded to the nearest dollar).

The monthly adjustment is therefore $56.00 ($13.00 × 13 ÷ 3, rounded to the nearest dollar).

Quarterly levy adjustment

Multiply rounded weekly levy adjustment by 13

General examples

Example 1

Employee's weekly earnings are $975.45. Employee has completed a Tax file number declaration claiming the tax-free threshold. The employee has also provided a Medicare levy variation declaration with five children shown at question 12.

Therefore, scale 2 is applied.

x = 975.99

Weekly withholding amount (y)

= (a × x) – b

= (0.3477 × 975.99) – 165.4431

= 173.9086 or $174.00 (rounded to nearest dollar)

Levy adjustment: weekly earnings are greater than WFT ($964.37) and less than the SOP ($1,205) appropriate to employee with five children. Formula (3) applies.

= (964.37 × 0.0200) – ([975.99 – 964.37] × 0.0800)

= 19.2874 – 0.9296

= 18.3578 or $18.00 (rounded to nearest dollar)

Net weekly withholding amount

$174.00 – $18.00 = $156.00

Example 2

Employee's fortnightly earnings are $1,110.30. Employee resides in zone B, has provided a Tax file number declaration that claims the tax-free threshold and a Withholding declaration that claims zone and tax offsets at the tax offsets questions that totals $1,645. The employee has also lodged a Medicare levy variation declaration claiming a full exemption from the Medicare levy.

Therefore, scale 5 is applied.

Convert to weekly equivalent

= (1,110.30 ÷ 2)

= 555.15 or $555 (ignore cents)

x = 555.99

Weekly withholding amount (y)

= (a × x) – b

= (0.1900 × 555.99) – 67.4635

= 38.1746 or $38.00 (rounded to nearest dollar)

Fortnightly withholding amount

$38.00 × 2 = $76.00

Tax offsets claimed at the tax offsets questions on the Withholding declaration

= 3.8% of $1,645

= 62.5100 or $63.00 (rounded to nearest dollar)

Net fortnightly withholding amount

$76.00 – $63.00 = $13.00.

Example 3

Employee's monthly earnings are $3,940.33. Employee has provided a Tax file number declaration claiming the tax-free threshold and claimed a total tax offset of $1,365 at the tax offsets question on the Withholding declaration. The employee has one child but is not eligible for a Medicare levy adjustment. The weekly equivalent of the employee’s earnings exceeds the Medicare levy SOP of $902 appropriate to an employee with one child.

Therefore, scale 2 is applied.

Convert to weekly equivalent

= ($3,940.33 + 0.01) × 3 ÷ 13

= 909.3092 or $909 (ignore cents)

x = 909.99

Weekly withholding amount (y)

= (a × x) – b

= (0.3477 × 909.99) – 165.4431

= 150.9604 or $151.00 (rounded to nearest dollar)

Monthly withholding amount

$151.00 × 13 ÷ 3 = $654.33 or $654.00 (rounded to nearest dollar)

Tax offset claimed

= 8.3% of $1,365

= 113.2950 or $113.00 (rounded to nearest dollar)

Net monthly withholding amount

$654.00 – $113.00 = $541.00

Calculating withholding amounts for payments made on a daily or casual basis

The withholding amounts shown in the Tax table for daily and casual workers (NAT 1024) can be expressed in a mathematical form, using the formulas and coefficients provided.

To work out withholding amounts using the formulas:

Multiply earnings (ignoring any cents) by five to work out the weekly equivalent. Add 99 cents to the result.
Calculate the weekly amount by applying the coefficients at:
–Scale 1 where an employee is not claiming the tax-free threshold
–Scale 2 where an employee is claiming the tax-free threshold.
Round the result to the nearest dollar.
Divide this amount by five to convert it to the daily equivalent.
Round the daily withholding amount to the nearest dollar.

Where the employee is entitled to the seniors and pensioners tax offset, replace with the appropriate coefficients from Tax table for seniors and pensioners (NAT 4466)

Accounting software

Software written in accordance with the formulas in this schedule should be tested for accuracy against the sample data provided. The results obtained when using the coefficients in this schedule may differ slightly from the amounts shown in the PAYG tax tables. The differences result from the rounding of components.

Sample data

Weekly withholding amounts

Amounts to be withheld

Weekly earnings $	Scale 1 No tax-free threshold $	Scale 2 With tax-free threshold $	Scale 3 Foreign resident $	Scale 5 Full Medicare exemption $	Scale 6 Half Medicare exemption $
44	8.00	—	14.00	—	—
45	9.00	—	15.00	—	—
116	25.00	—	38.00	—	—
117	25.00	—	38.00	—	—
249	56.00	—	81.00	—	—
250	56.00	—	81.00	—	—
354	80.00	—	115.00	—	—
355	81.00	—	115.00	—	—
360	82.00	1.00	117.00	1.00	1.00
361	82.00	1.00	117.00	1.00	1.00
394	94.00	8.00	128.00	8.00	8.00
395	94.00	8.00	128.00	8.00	8.00
492	128.00	36.00	160.00	26.00	26.00
493	128.00	36.00	160.00	26.00	26.00
659	186.00	71.00	214.00	58.00	58.00
660	186.00	71.00	214.00	58.00	58.00
710	204.00	82.00	231.00	68.00	70.00
711	204.00	82.00	231.00	68.00	70.00
825	244.00	122.00	268.00	105.00	113.00
826	244.00	122.00	268.00	106.00	114.00
931	280.00	159.00	303.00	140.00	149.00
932	281.00	159.00	303.00	140.00	150.00
1187	369.00	248.00	386.00	224.00	236.00
1188	369.00	248.00	386.00	224.00	236.00
1281	405.00	280.00	416.00	255.00	267.00
1282	406.00	281.00	417.00	255.00	268.00
1537	505.00	369.00	500.00	338.00	353.00
1538	506.00	369.00	500.00	338.00	354.00
1844	625.00	488.00	613.00	451.00	470.00
1845	625.00	489.00	614.00	452.00	470.00
2119	732.00	596.00	715.00	553.00	574.00
2120	733.00	596.00	716.00	554.00	575.00
2490	877.00	740.00	852.00	690.00	715.00
2491	877.00	741.00	853.00	691.00	716.00
2652	940.00	803.00	912.00	750.00	777.00
2653	940.00	804.00	913.00	751.00	777.00
2736	973.00	836.00	943.00	781.00	809.00
2737	973.00	837.00	944.00	782.00	809.00
2898	1036.00	899.00	1003.00	841.00	870.00
2899	1036.00	900.00	1004.00	842.00	871.00
2913	1042.00	905.00	1009.00	847.00	876.00
2914	1042.00	906.00	1009.00	847.00	876.00
3110	1119.00	982.00	1082.00	920.00	951.00
3111	1119.00	982.00	1082.00	920.00	951.00
3460	1290.00	1119.00	1211.00	1049.00	1084.00
3461	1291.00	1119.00	1212.00	1050.00	1084.00

Fortnightly withholding amounts

Fortnightly earnings $	Scale 1 No tax-free threshold $	Scale 2 With tax-free threshold $	Scale 3 Foreign resident $	Scale 5 Full Medicare exemption $	Scale 6 Half Medicare exemption $
88	16.00	—	28.00	—	—
90	18.00	—	30.00	—	—
232	50.00	—	76.00	—	—
234	50.00	—	76.00	—	—
498	112.00	—	162.00	—	—
500	112.00	—	162.00	—	—
708	160.00	—	230.00	—	—
710	162.00	—	230.00	—	—
720	164.00	2.00	234.00	2.00	2.00
722	164.00	2.00	234.00	2.00	2.00
788	188.00	16.00	256.00	16.00	16.00
790	188.00	16.00	256.00	16.00	16.00
984	256.00	72.00	320.00	52.00	52.00
986	256.00	72.00	320.00	52.00	52.00
1318	372.00	142.00	428.00	116.00	116.00
1320	372.00	142.00	428.00	116.00	116.00
1420	408.00	164.00	462.00	136.00	140.00
1422	408.00	164.00	462.00	136.00	140.00
1650	488.00	244.00	536.00	210.00	226.00
1652	488.00	244.00	536.00	212.00	228.00
1862	560.00	318.00	606.00	280.00	298.00
1864	562.00	318.00	606.00	280.00	300.00
2374	738.00	496.00	772.00	448.00	472.00
2376	738.00	496.00	772.00	448.00	472.00
2562	810.00	560.00	832.00	510.00	534.00
2564	812.00	562.00	834.00	510.00	536.00
3074	1010.00	738.00	1000.00	676.00	706.00
3076	1012.00	738.00	1000.00	676.00	708.00
3688	1250.00	976.00	1226.00	902.00	940.00
3690	1250.00	978.00	1228.00	904.00	940.00
4238	1464.00	1192.00	1430.00	1106.00	1148.00
4240	1466.00	1192.00	1432.00	1108.00	1150.00
4980	1754.00	1480.00	1704.00	1380.00	1430.00
4982	1754.00	1482.00	1706.00	1382.00	1432.00
5304	1880.00	1606.00	1824.00	1500.00	1554.00
5306	1880.00	1608.00	1826.00	1502.00	1554.00
5472	1946.00	1672.00	1886.00	1562.00	1618.00
5474	1946.00	1674.00	1888.00	1564.00	1618.00
5796	2072.00	1798.00	2006.00	1682.00	1740.00
5798	2072.00	1800.00	2008.00	1684.00	1742.00
5826	2084.00	1810.00	2018.00	1694.00	1752.00
5828	2084.00	1812.00	2018.00	1694.00	1752.00
6220	2238.00	1964.00	2164.00	1840.00	1902.00
6222	2238.00	1964.00	2164.00	1840.00	1902.00
6920	2580.00	2238.00	2422.00	2098.00	2168.00
6922	2582.00	2238.00	2424.00	2100.00	2168.00

Monthly withholding amounts

Monthly earnings $	Scale 1 No tax-free threshold $	Scale 2 With tax-free threshold $	Scale 3 Foreign resident $	Scale 5 Full Medicare exemption $	Scale 6 Half Medicare exemption $
190.67	35.00	—	61.00	—	—
195.00	39.00	—	65.00	—	—
502.67	108.00	—	165.00	—	—
507.00	108.00	—	165.00	—	—
1079.00	243.00	—	351.00	—	—
1083.33	243.00	—	351.00	—	—
1534.00	347.00	—	498.00	—	—
1538.33	351.00	—	498.00	—	—
1560.00	355.00	4.00	507.00	4.00	4.00
1564.33	355.00	4.00	507.00	4.00	4.00
1707.33	407.00	35.00	555.00	35.00	35.00
1711.67	407.00	35.00	555.00	35.00	35.00
2132.00	555.00	156.00	693.00	113.00	113.00
2136.33	555.00	156.00	693.00	113.00	113.00
2855.67	806.00	308.00	927.00	251.00	251.00
2860.00	806.00	308.00	927.00	251.00	251.00
3076.67	884.00	355.00	1001.00	295.00	303.00
3081.00	884.00	355.00	1001.00	295.00	303.00
3575.00	1057.00	529.00	1161.00	455.00	490.00
3579.33	1057.00	529.00	1161.00	459.00	494.00
4034.33	1213.00	689.00	1313.00	607.00	646.00
4038.67	1218.00	689.00	1313.00	607.00	650.00
5143.67	1599.00	1075.00	1673.00	971.00	1023.00
5148.00	1599.00	1075.00	1673.00	971.00	1023.00
5551.00	1755.00	1213.00	1803.00	1105.00	1157.00
5555.33	1759.00	1218.00	1807.00	1105.00	1161.00
6660.33	2188.00	1599.00	2167.00	1465.00	1530.00
6664.67	2193.00	1599.00	2167.00	1465.00	1534.00
7990.67	2708.00	2115.00	2656.00	1954.00	2037.00
7995.00	2708.00	2119.00	2661.00	1959.00	2037.00
9182.33	3172.00	2583.00	3098.00	2396.00	2487.00
9186.67	3176.00	2583.00	3103.00	2401.00	2492.00
10790.00	3800.00	3207.00	3692.00	2990.00	3098.00
10794.33	3800.00	3211.00	3696.00	2994.00	3103.00
11492.00	4073.00	3480.00	3952.00	3250.00	3367.00
11496.33	4073.00	3484.00	3956.00	3254.00	3367.00
11856.00	4216.00	3623.00	4086.00	3384.00	3506.00
11860.33	4216.00	3627.00	4091.00	3389.00	3506.00
12558.00	4489.00	3896.00	4346.00	3644.00	3770.00
12562.33	4489.00	3900.00	4351.00	3649.00	3774.00
12623.00	4515.00	3922.00	4372.00	3670.00	3796.00
12627.33	4515.00	3926.00	4372.00	3670.00	3796.00
13476.67	4849.00	4255.00	4689.00	3987.00	4121.00
13481.00	4849.00	4255.00	4689.00	3987.00	4121.00
14993.33	5590.00	4849.00	5248.00	4546.00	4697.00
14997.67	5594.00	4849.00	5252.00	4550.00	4697.00

Sample data – Scale 2

Weekly Medicare levy adjustment

Weekly earnings $	Spouse only $	1 child $	2 children $	3 children $	4 children $	5 children $
394	—	—	—	—	—	—
395	—	—	—	—	—	—
443	5.00	5.00	5.00	5.00	5.00	5.00
444	5.00	5.00	5.00	5.00	5.00	5.00
492	10.00	10.00	10.00	10.00	10.00	10.00
493	10.00	10.00	10.00	10.00	10.00	10.00
517	10.00	10.00	10.00	10.00	10.00	10.00
518	10.00	10.00	10.00	10.00	10.00	10.00
542	11.00	11.00	11.00	11.00	11.00	11.00
543	11.00	11.00	11.00	11.00	11.00	11.00
567	11.00	11.00	11.00	11.00	11.00	11.00
568	11.00	11.00	11.00	11.00	11.00	11.00
592	12.00	12.00	12.00	12.00	12.00	12.00
593	12.00	12.00	12.00	12.00	12.00	12.00
617	12.00	12.00	12.00	12.00	12.00	12.00
618	12.00	12.00	12.00	12.00	12.00	12.00
642	13.00	13.00	13.00	13.00	13.00	13.00
643	13.00	13.00	13.00	13.00	13.00	13.00
667	13.00	13.00	13.00	13.00	13.00	13.00
668	13.00	13.00	13.00	13.00	13.00	13.00
692	11.00	14.00	14.00	14.00	14.00	14.00
693	11.00	14.00	14.00	14.00	14.00	14.00
717	9.00	14.00	14.00	14.00	14.00	14.00
718	9.00	14.00	14.00	14.00	14.00	14.00
742	7.00	13.00	15.00	15.00	15.00	15.00
743	7.00	13.00	15.00	15.00	15.00	15.00
767	5.00	11.00	15.00	15.00	15.00	15.00
768	5.00	11.00	15.00	15.00	15.00	15.00
792	3.00	9.00	15.00	16.00	16.00	16.00
793	3.00	9.00	15.00	16.00	16.00	16.00
817	1.00	7.00	13.00	16.00	16.00	16.00
818	1.00	7.00	13.00	16.00	16.00	16.00
842	—	5.00	11.00	17.00	17.00	17.00
843	—	5.00	11.00	17.00	17.00	17.00
867	—	3.00	9.00	15.00	17.00	17.00
868	—	3.00	9.00	15.00	17.00	17.00
892	—	1.00	7.00	13.00	18.00	18.00
893	—	1.00	7.00	13.00	18.00	18.00
917	—	—	5.00	11.00	17.00	18.00
918	—	—	5.00	11.00	17.00	18.00
942	—	—	3.00	9.00	15.00	19.00
943	—	—	3.00	9.00	15.00	19.00
967	—	—	1.00	7.00	13.00	19.00
968	—	—	1.00	7.00	13.00	19.00
1128	—	—	—	—	—	6.00
1129	—	—	—	—	—	6.00
1204	—	—	—	—	—	—
1205	—	—	—	—	—	—

Fortnightly Medicare levy adjustment

Fortnightly earnings $	Spouse only $	1 child $	2 children $	3 children $	4 children $	5 children $
788	—	—	—	—	—	—
790	—	—	—	—	—	—
886	10.00	10.00	10.00	10.00	10.00	10.00
888	10.00	10.00	10.00	10.00	10.00	10.00
984	20.00	20.00	20.00	20.00	20.00	20.00
986	20.00	20.00	20.00	20.00	20.00	20.00
1034	20.00	20.00	20.00	20.00	20.00	20.00
1036	20.00	20.00	20.00	20.00	20.00	20.00
1084	22.00	22.00	22.00	22.00	22.00	22.00
1086	22.00	22.00	22.00	22.00	22.00	22.00
1134	22.00	22.00	22.00	22.00	22.00	22.00
1136	22.00	22.00	22.00	22.00	22.00	22.00
1184	24.00	24.00	24.00	24.00	24.00	24.00
1186	24.00	24.00	24.00	24.00	24.00	24.00
1234	24.00	24.00	24.00	24.00	24.00	24.00
1236	24.00	24.00	24.00	24.00	24.00	24.00
1284	26.00	26.00	26.00	26.00	26.00	26.00
1286	26.00	26.00	26.00	26.00	26.00	26.00
1334	26.00	26.00	26.00	26.00	26.00	26.00
1336	26.00	26.00	26.00	26.00	26.00	26.00
1384	22.00	28.00	28.00	28.00	28.00	28.00
1386	22.00	28.00	28.00	28.00	28.00	28.00
1434	18.00	28.00	28.00	28.00	28.00	28.00
1436	18.00	28.00	28.00	28.00	28.00	28.00
1484	14.00	26.00	30.00	30.00	30.00	30.00
1486	14.00	26.00	30.00	30.00	30.00	30.00
1534	10.00	22.00	30.00	30.00	30.00	30.00
1536	10.00	22.00	30.00	30.00	30.00	30.00
1584	6.00	18.00	30.00	32.00	32.00	32.00
1586	6.00	18.00	30.00	32.00	32.00	32.00
1634	2.00	14.00	26.00	32.00	32.00	32.00
1636	2.00	14.00	26.00	32.00	32.00	32.00
1684	—	10.00	22.00	34.00	34.00	34.00
1686	—	10.00	22.00	34.00	34.00	34.00
1734	—	6.00	18.00	30.00	34.00	34.00
1736	—	6.00	18.00	30.00	34.00	34.00
1784	—	2.00	14.00	26.00	36.00	36.00
1786	—	2.00	14.00	26.00	36.00	36.00
1834	—	—	10.00	22.00	34.00	36.00
1836	—	—	10.00	22.00	34.00	36.00
1884	—	—	6.00	18.00	30.00	38.00
1886	—	—	6.00	18.00	30.00	38.00
1934	—	—	2.00	14.00	26.00	38.00
1936	—	—	2.00	14.00	26.00	38.00
2256	—	—	—	—	—	12.00
2258	—	—	—	—	—	12.00
2408	—	—	—	—	—	—
2410	—	—	—	—	—	—

Monthly Medicare levy adjustment

Monthly earnings $	Spouse only $	1 child $	2 children $	3 children $	4 children $	5 children $
1707.33	—	—	—	—	—	—
1711.67	—	—	—	—	—	—
1919.67	22.00	22.00	22.00	22.00	22.00	22.00
1924.00	22.00	22.00	22.00	22.00	22.00	22.00
2132.00	43.00	43.00	43.00	43.00	43.00	43.00
2136.33	43.00	43.00	43.00	43.00	43.00	43.00
2240.33	43.00	43.00	43.00	43.00	43.00	43.00
2244.67	43.00	43.00	43.00	43.00	43.00	43.00
2348.67	48.00	48.00	48.00	48.00	48.00	48.00
2353.00	48.00	48.00	48.00	48.00	48.00	48.00
2457.00	48.00	48.00	48.00	48.00	48.00	48.00
2461.33	48.00	48.00	48.00	48.00	48.00	48.00
2565.33	52.00	52.00	52.00	52.00	52.00	52.00
2569.67	52.00	52.00	52.00	52.00	52.00	52.00
2673.67	52.00	52.00	52.00	52.00	52.00	52.00
2678.00	52.00	52.00	52.00	52.00	52.00	52.00
2782.00	56.00	56.00	56.00	56.00	56.00	56.00
2786.33	56.00	56.00	56.00	56.00	56.00	56.00
2890.33	56.00	56.00	56.00	56.00	56.00	56.00
2894.67	56.00	56.00	56.00	56.00	56.00	56.00
2998.67	48.00	61.00	61.00	61.00	61.00	61.00
3003.00	48.00	61.00	61.00	61.00	61.00	61.00
3107.00	39.00	61.00	61.00	61.00	61.00	61.00
3111.33	39.00	61.00	61.00	61.00	61.00	61.00
3215.33	30.00	56.00	65.00	65.00	65.00	65.00
3219.67	30.00	56.00	65.00	65.00	65.00	65.00
3323.67	22.00	48.00	65.00	65.00	65.00	65.00
3328.00	22.00	48.00	65.00	65.00	65.00	65.00
3432.00	13.00	39.00	65.00	69.00	69.00	69.00
3436.33	13.00	39.00	65.00	69.00	69.00	69.00
3540.33	4.00	30.00	56.00	69.00	69.00	69.00
3544.67	4.00	30.00	56.00	69.00	69.00	69.00
3648.67	—	22.00	48.00	74.00	74.00	74.00
3653.00	—	22.00	48.00	74.00	74.00	74.00
3757.00	—	13.00	39.00	65.00	74.00	74.00
3761.33	—	13.00	39.00	65.00	74.00	74.00
3865.33	—	4.00	30.00	56.00	78.00	78.00
3869.67	—	4.00	30.00	56.00	78.00	78.00
3973.67	—	—	22.00	48.00	74.00	78.00
3978.00	—	—	22.00	48.00	74.00	78.00
4082.00	—	—	13.00	39.00	65.00	82.00
4086.33	—	—	13.00	39.00	65.00	82.00
4190.33	—	—	4.00	30.00	56.00	82.00
4194.67	—	—	4.00	30.00	56.00	82.00
4888.00	—	—	—	—	—	26.00
4892.33	—	—	—	—	—	26.00
5217.33	—	—	—	—	—	—
5221.67	—	—	—	—	—	—

Sample data – Scale 6

Weekly Medicare half-levy adjustment

Weekly earnings $	1 child $	2 children $	3 children $	4 children $	5 children $
659	—	—	—	—	—
660	—	—	—	—	—
742	4.00	4.00	4.00	4.00	4.00
743	4.00	4.00	4.00	4.00	4.00
825	8.00	8.00	8.00	8.00	8.00
826	3.00	6.00	8.00	8.00	8.00
840	2.00	5.00	8.00	8.00	8.00
841	2.00	5.00	8.00	8.00	8.00
855	2.00	5.00	8.00	9.00	9.00
856	2.00	5.00	8.00	9.00	9.00
870	1.00	4.00	7.00	9.00	9.00
871	1.00	4.00	7.00	9.00	9.00
885	1.00	4.00	7.00	9.00	9.00
886	1.00	4.00	7.00	9.00	9.00
900	—	3.00	6.00	9.00	9.00
901	—	3.00	6.00	9.00	9.00
915	—	2.00	6.00	9.00	9.00
916	—	2.00	5.00	9.00	9.00
930	—	2.00	5.00	8.00	9.00
931	—	2.00	5.00	8.00	9.00
945	—	1.00	4.00	7.00	9.00
946	—	1.00	4.00	7.00	9.00
960	—	1.00	4.00	7.00	10.00
961	—	1.00	4.00	7.00	10.00
975	—	—	3.00	6.00	9.00
976	—	—	3.00	6.00	9.00
990	—	—	3.00	6.00	9.00
991	—	—	2.00	6.00	9.00
1005	—	—	2.00	5.00	8.00
1006	—	—	2.00	5.00	8.00
1020	—	—	1.00	4.00	7.00
1021	—	—	1.00	4.00	7.00
1035	—	—	1.00	4.00	7.00
1036	—	—	1.00	4.00	7.00
1050	—	—	—	3.00	6.00
1051	—	—	—	3.00	6.00
1065	—	—	—	3.00	6.00
1066	—	—	—	3.00	6.00
1080	—	—	—	2.00	5.00
1081	—	—	—	2.00	5.00
1095	—	—	—	1.00	4.00
1096	—	—	—	1.00	4.00
1110	—	—	—	1.00	4.00
1111	—	—	—	1.00	4.00
1128	—	—	—	—	3.00
1129	—	—	—	—	3.00
1204	—	—	—	—	—
1205	—	—	—	—	—

Fortnightly Medicare half-levy adjustment

Fortnightly earnings $	1 child $	2 children $	3 children $	4 children $	5 children $
1318	—	—	—	—	—
1320	—	—	—	—	—
1484	8.00	8.00	8.00	8.00	8.00
1486	8.00	8.00	8.00	8.00	8.00
1650	16.00	16.00	16.00	16.00	16.00
1652	6.00	12.00	16.00	16.00	16.00
1680	4.00	10.00	16.00	16.00	16.00
1682	4.00	10.00	16.00	16.00	16.00
1710	4.00	10.00	16.00	18.00	18.00
1712	4.00	10.00	16.00	18.00	18.00
1740	2.00	8.00	14.00	18.00	18.00
1742	2.00	8.00	14.00	18.00	18.00
1770	2.00	8.00	14.00	18.00	18.00
1772	2.00	8.00	14.00	18.00	18.00
1800	—	6.00	12.00	18.00	18.00
1802	—	6.00	12.00	18.00	18.00
1830	—	4.00	12.00	18.00	18.00
1832	—	4.00	10.00	18.00	18.00
1860	—	4.00	10.00	16.00	18.00
1862	—	4.00	10.00	16.00	18.00
1890	—	2.00	8.00	14.00	18.00
1892	—	2.00	8.00	14.00	18.00
1920	—	2.00	8.00	14.00	20.00
1922	—	2.00	8.00	14.00	20.00
1950	—	—	6.00	12.00	18.00
1952	—	—	6.00	12.00	18.00
1980	—	—	6.00	12.00	18.00
1982	—	—	4.00	12.00	18.00
2010	—	—	4.00	10.00	16.00
2012	—	—	4.00	10.00	16.00
2040	—	—	2.00	8.00	14.00
2042	—	—	2.00	8.00	14.00
2070	—	—	2.00	8.00	14.00
2072	—	—	2.00	8.00	14.00
2100	—	—	—	6.00	12.00
2102	—	—	—	6.00	12.00
2130	—	—	—	6.00	12.00
2132	—	—	—	6.00	12.00
2160	—	—	—	4.00	10.00
2162	—	—	—	4.00	10.00
2190	—	—	—	2.00	8.00
2192	—	—	—	2.00	8.00
2220	—	—	—	2.00	8.00
2222	—	—	—	2.00	8.00
2256	—	—	—	—	6.00
2258	—	—	—	—	6.00
2408	—	—	—	—	—
2410	—	—	—	—	—

Monthly Medicare half-levy adjustment

Monthly earnings $	1 child $	2 children $	3 children $	4 children $	5 children $
2855.67	—	—	—	—	—
2860.00	—	—	—	—	—
3215.33	17.00	17.00	17.00	17.00	17.00
3219.67	17.00	17.00	17.00	17.00	17.00
3575.00	35.00	35.00	35.00	35.00	35.00
3579.33	13.00	26.00	35.00	35.00	35.00
3640.00	9.00	22.00	35.00	35.00	35.00
3644.33	9.00	22.00	35.00	35.00	35.00
3705.00	9.00	22.00	35.00	39.00	39.00
3709.33	9.00	22.00	35.00	39.00	39.00
3770.00	4.00	17.00	30.00	39.00	39.00
3774.33	4.00	17.00	30.00	39.00	39.00
3835.00	4.00	17.00	30.00	39.00	39.00
3839.33	4.00	17.00	30.00	39.00	39.00
3900.00	—	13.00	26.00	39.00	39.00
3904.33	—	13.00	26.00	39.00	39.00
3965.00	—	9.00	26.00	39.00	39.00
3969.33	—	9.00	22.00	39.00	39.00
4030.00	—	9.00	22.00	35.00	39.00
4034.33	—	9.00	22.00	35.00	39.00
4095.00	—	4.00	17.00	30.00	39.00
4099.33	—	4.00	17.00	30.00	39.00
4160.00	—	4.00	17.00	30.00	43.00
4164.33	—	4.00	17.00	30.00	43.00
4225.00	—	—	13.00	26.00	39.00
4229.33	—	—	13.00	26.00	39.00
4290.00	—	—	13.00	26.00	39.00
4294.33	—	—	9.00	26.00	39.00
4355.00	—	—	9.00	22.00	35.00
4359.33	—	—	9.00	22.00	35.00
4420.00	—	—	4.00	17.00	30.00
4424.33	—	—	4.00	17.00	30.00
4485.00	—	—	4.00	17.00	30.00
4489.33	—	—	4.00	17.00	30.00
4550.00	—	—	—	13.00	26.00
4554.33	—	—	—	13.00	26.00
4615.00	—	—	—	13.00	26.00
4619.33	—	—	—	13.00	26.00
4680.00	—	—	—	9.00	22.00
4684.33	—	—	—	9.00	22.00
4745.00	—	—	—	4.00	17.00
4749.33	—	—	—	4.00	17.00
4810.00	—	—	—	4.00	17.00
4814.33	—	—	—	4.00	17.00
4888.00	—	—	—	—	13.00
4892.33	—	—	—	—	13.00
5217.33	—	—	—	—	—
5221.67	—	—	—	—	—

Other statements of formulas

Statements of formulas for other classes of payees are also available. These include PAYG withholding:

■Statement of formulas for calculating Higher Education Loan Program (HELP), Trade Support Loan (TSL) and Student Financial Supplement Scheme (SFSS) components (NAT 3539)
■Tax table for individuals employed in the horticultural or shearing industry (NAT 1013)
■Tax table for actors, variety artists and other entertainers (NAT 1023)
■Tax table for seniors and pensioners (NAT 4466).

Tax file number (TFN) declarations

The answers your employees provide on their Tax file number declaration (NAT 3092) determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from an employee, it will override the previous one.

If an employee does not give you a valid Tax file number declaration within 14 days of starting an employer/employee relationship, you must complete a Tax file number declaration with all available details of the employee and send it to us.

When a TFN has not been provided

You must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee, (ignoring any cents), if all of the following apply:

■they have not quoted their TFN
■they have not claimed an exemption from quoting their TFN
■they have not advised you that they have applied for a TFN or have made an enquiry with us.

If an employee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals (NAT 1432) with us, they have 28 days to provide you with their TFN.

If the employee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) unless we tell you not to.

Do not allow for any tax offsets or Medicare levy adjustments. Do not withhold any amount for:

■Higher Education Loan Program (HELP) debts
■Trade Support Loan (TSL) debts
■Financial Supplement debts.

When your employee is a foreign resident

If your employee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

There are two ways you can withhold from a foreign resident’s earnings:

■If they have given you a valid TFN, use scale 3.
■If they have not given you a valid TFN, use scale 4.

Foreign residents cannot claim tax offsets to reduce withholding. They may, in limited circumstances, be entitled to claim a zone or overseas forces offset in their income tax return. If your foreign resident employee has claimed a tax offset on the Tax file number declaration, you don’t need to make any adjustments to the amount you withhold.

Withholding declarations

An employee may use a Withholding declaration (NAT 3093) to advise you of a tax offset they choose to claim through reduced withholding from you.

Employees can also use a Withholding declaration to advise you of any changes to their situation that may affect the amount you need to withhold from their payments.

Changes that may affect the amount you need to withhold include:

■becoming or ceasing to be an Australian resident for tax purposes
■claiming or discontinuing a claim for the tax-free threshold
■advising of a HELP, TSL or Financial Supplement debt, or changes to them
■entitlement to a seniors and pensioners tax offset.

When your employee provides you with a Withholding declaration it will take effect from the next payment you make. If you receive an updated declaration from an employee, it will replace the previous one.

An employee must have provided you with a valid Tax file number declaration before they can provide you with a Withholding declaration.

When your employee has a HELP, TSL or Financial Supplement debt

If your employee has a HELP, TSL or Financial Supplement debt, you may need to withhold additional amounts from their payments. Your employee will need to notify you of this on their Tax file number declaration or Withholding declaration.

Work it out

To calculate additional withholding amounts for:

■HELP or TSL debts, refer to either
–      HELP/TSL weekly tax table (NAT 2173)
–      HELP/TSL fortnightly tax table (NAT 2185)
–      HELP/TSL monthly tax table (NAT 2186)
■Financial Supplement debts, refer to either
–      SFSS weekly tax table (NAT 3306)
–      SFSS fortnightly tax table (NAT 3307)
–      SFSS monthly tax table (NAT 3308)
■Statement of formulas, refer to
–   Statement of formulas for calculating Higher Education Loan Program (HELP), Trade Support Loan (TSL) and Student Financial Supplement Scheme (SFSS) components (NAT 3539)

Employees who are entitled to a reduction of Medicare levy or do not have to pay the Medicare levy because of low family income, will not have to make a compulsory HELP, TSL or Financial Supplement repayment for that year. The exemption from making a compulsory HELP, TSL or Financial Supplement repayment may be claimed on the Medicare levy variation declaration.

Allowances

Generally, allowances are added to normal earnings and the amount to withhold is calculated on the total amount of earnings and allowances.

Find out more

Withholding from allowances

Leave loading

If you pay leave loading as a lump sum, use Tax table for back payments, commissions, bonuses and similar payments (NAT 3348) to calculate withholding.

If you pay leave loading on a pro-rata basis, add the leave loading payment to earnings for that period to calculate withholding.

Holiday pay, long service leave and employment termination payments

Employees who continue working for you

You must include holiday pay (including any leave loading) and long service leave payments as part of normal earnings, except when they are paid on termination of employment.

Find out more

Withholding from annual and long service leave for continuing employees

Employees who stop working for you

This schedule does not cover any lump sum payments made to an employee who stops working for you.

If an employee has unused annual leave, leave loading or long service leave, refer to Tax table for unused leave payments on termination of employment (NAT 3351).

Any other lump sum payments may be employment termination payments, refer to Tax table for employment termination payments (NAT 70980).

Do not withhold any amount for HELP, TSL or Financial Supplement debts from lump sum termination payments.

Claiming tax offsets

If your employee chooses to claim their entitlement to a tax offset through reduced withholding, they must provide you with a Withholding declaration.

To work out the employee’s annual tax offset entitlement into a weekly, fortnightly, monthly or quarterly, refer to Tax offsets.

Do not allow for any tax offsets if any of the following apply:

■where no tax-free threshold is claimed
■you are using foreign resident rates
■when an employee does not provide you with their TFN.

Medicare levy adjustment

To claim the Medicare levy adjustment available to some low income earners with dependants, your employee must lodge a Medicare levy variation declaration (NAT 0929) with their Tax file number declaration.

Some employees may be liable for an increased rate of Medicare levy or the Medicare levy surcharge as a result of new income tests. They can lodge a Medicare levy variation declaration, requesting you to increase the amount to be withheld from their payments.

Work it out

Medicare levy adjustment

Schedule 2 - Tax table for individuals employed in the horticultural or shearing industry

For payments made on or after 1 July 2015

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by sections 12-35 of Schedule 1 to the TAA.

Use the Withholding look-up tool to quickly work out the amount to withhold.

Using this table

You should use this table if you make payments to individuals in the horticultural industry who:

■work in any process associated with the production, cultivation or harvest of a horticultural crop
■perform the process on the grower’s property
■do not work for the same grower for a continuous period exceeding six months
■have given you a valid Tax file number declaration (NAT 3092) and have claimed the tax-free threshold.

Also use this table if you make payments to individuals in the shearing industry such as shearers, crutchers, wool classers, cooks, shed hands and pressers who:

■have given you a valid Tax file number declaration (NAT 3092) and have claimed the tax-free threshold
■do not work for the same employer for a continuous period exceeding six months.

For all other circumstances use the relevant PAYG withholding weekly or fortnightly tax table.

Get it done

You can download a printable version of Tax table for individuals employed in the horticultural or shearing industry (NAT 1013, 519KB) in Portable Document Format (PDF).

If you employ individuals under the Seasonal labour mobility program this tax table does not apply. For these individuals you are required to withhold at 15%.

For more information about the program, refer to Seasonal labour mobility program – frequently asked questions for approved employers.

Working out the withholding amount

To work out the amount you need to withhold you must

Input your employees total earnings into the Withholding look-up tool.
Use the appropriate column to find the correct amount to withhold
–   column 2 if the resident employee has given you a TFN
–   column 3 if the resident employee has not given you a TFN
–   column 4 if the foreign resident employee has given you a TFN
–   column 5 if the foreign resident employee has not given you a TFN.

Example

An employee has earnings of $231.50.

To work out the correct amount to withhold, ignore cents, input $231 into the Withholding look-up tool.

If the employee is:

■a resident employee and has given you a TFN use column 2 to find the correct amount to withhold ($30)
■a resident employee and has not given you a TFN use column 3 to find the correct amount to withhold ($113)
■a foreign employee and has given you a TFN use column 4 to find the correct amount to withhold ($75)
■a foreign employee and has not given you a TFN use column 5 to find the correct amount to withhold ($108).

Resident employees

The standard rate of withholding of 13% applies where an employee has given you a valid TFN and you withhold amounts using the figures shown in column 2 of the Withholding look-up tool.

If the employee has not given you a valid TFN, you must withhold amounts using the figures shown in column 3 of the Withholding look-up tool.

When your employee is a foreign resident

If your employee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

Where an employee has given you a valid TFN, you withhold amounts using the figures shown in column 4 of the Withholding look-up tool. If the employee has not given you a valid TFN, you must withhold amounts using the figures shown in column 5 of the Withholding look-up tool.

Foreign residents cannot claim tax offsets to reduce withholding. They may, in limited circumstances, be entitled to claim a zone or overseas forces offset in their income tax return. If your foreign resident employee has claimed a tax offset on the Tax file number declaration, you don’t need to make any adjustments to the amount you withhold.

Pay period

The rates in this tax table apply irrespective of the pay period.

Using a formula

The withholding amounts shown in this table can be expressed in mathematical form.

If you have developed your own payroll software package, you can use the formulas and coefficients outlined below.

The formulas comprise linear equations of the form y = ax, where:

■y is the amount to be withheld expressed in dollars
■x is earnings for the pay period, ignoring any cents
■a is the value of the coefficient as shown in table A.

Table A: Resident or foreign resident rate

Resident – a	Foreign resident – a
Tax file number	0.13	0.325
No tax file number	0.49	0.47

Rounding of withholding amounts

The withholding amounts calculated as a result of applying the above formulas should be rounded to the nearest dollar. Results ending in 50 cents are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Accounting software

Software written in accordance with the formulas in this tax table should be tested for accuracy against the Withholding look-up tool. The results obtained when using the coefficients in this table may differ slightly from the Withholding look-up tool. The differences result from the rounding of components.

Tax file number declarations

The answers your employees provide on their Tax file number declaration (NAT 3092) determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from an employee, it will override the previous one.

If an employee does not give you a valid Tax file number declaration within 14 days of starting an employer/employee relationship, you must complete a Tax file number declaration with all available details of the employee and send it to us.

When a TFN has not been provided

You must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents), if all of the following apply:

■they have not quoted their TFN
■they have not claimed an exemption from quoting their TFN
■they have not advised you that they have applied for a TFN or have made an enquiry with us.

If an employee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals (NAT 1432) with us, they have 28 days to provide you with their TFN.

If the employee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) unless we tell you not to.

Do not allow for any tax offsets or Medicare levy adjustment. Do not withhold any amount for:

■Higher Education Loan Program (HELP) debts
■Trade Support Loan (TSL) debts
■Financial Supplement debts.

Varying your PAYG withholding

If your employee believes that for their circumstances the amount you withhold will be too much, they may apply to us for a variation to reduce the amount of withholding.

Find out more

For more information, refer to PAYG withholding – varying your PAYG withholding.

Schedule 3 – Tax table for actors, variety artists and other entertainers

For payments made on or after 1 July 2015

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by section 12-35 of Schedule 1 to the TAA.

Use the Withholding look-up tool to quickly work out the amount to withhold.

Using this table

You should use this table if you make payments to employees who are actors, variety artists and other entertainers who receive payments for their performances.

Do not use this table if you make payments to employees, or other individuals engaged under a contract, to perform in a promotional activity that is any one of the following:

■conducted in the presence of an audience
■intended to be communicated to an audience by print or electronic media
■for a film or tape
■for a television or radio broadcast.

For these types of payments the Commissioner has varied the rate of withholding to 20% of the payment.

Find out more

For more information refer to PAYG withholding – performing artists and promotional activities.

Get it done

You can download a printable version of the Tax table for actors, variety artists and other entertainers (NAT 1023, 490KB) in Portable Document Format (PDF).

For all other relevant employees, refer to PAYG withholding Weekly tax table or Fortnightly tax table.

Do not use this table for payments made to foreign residents engaged as contractors. These payments are subject to foreign resident withholding.

Find out more

For more information refer to Withholding from payments to foreign residents for entertainment or sports activities.

Working out the withholding amount

The tax table for actors, variety artists and other entertainers is only applicable to those who have three performances per week and have claimed the tax-free threshold. If the number of performances per week is different, or the employee has not claimed the tax-free threshold, use the formulas to calculate withholding amounts.

To work out the amount you need to withhold using the tax table, you must:

Ignore any cents, input the employee's daily earnings into the Withholding look-up tool and refer to the corresponding amount to be withheld in column 2.
If the employee has claimed any tax offsets, see Claiming tax offsets to work out the daily value of the amount claimed. Subtract the daily value of the tax offsets from the amount found in step 1.

Example

An employee has claimed the tax-free threshold, earns $279.35 daily, works three performances this week and claims tax offsets of $500. Ignoring cents, input $279 into the Withholding look-up tool and refer to the corresponding amount to be withheld in column 2 of $24.00. Reduce this amount by the daily value of the tax offsets of $3.00 ($500 ÷ 52 ÷ 3 rounded to the nearest dollar).

The amount to withhold is $21.00 ($24.00 – $3.00).

Using a formula

The withholding amounts shown in this table can be expressed in a mathematical form.

If you have developed your own payroll software package, you can use the formulas and the coefficients outlined in table A and table B.

This section should be read with Statement of formulas for calculating amounts to be withheld (NAT 1004).

The formulas comprise linear equations of the form y = ax – b where:

■y is the weekly withholding amount expressed in dollars
■x is the weekly earnings rounded down to whole dollars plus 99 cents, and
■a and b are the values of the coefficient for the formulas as shown in tables A and B.

Table A: Employee has claimed the tax-free threshold

Weekly earnings (x) less than	a	b
$443	—	—
$493	0.1520	67.4635
$617	0.2320	106.9673
$889	0.1680	67.4642
$1,602	0.2782	165.4431
$1,923	0.2760	161.9815
$4,326	0.3120	231.2123
$4,326 and over	0.3920	577.3662

Table B: Employee has not claimed the tax-free threshold

Weekly earnings (x) less than	a	b
$56	0.1520	0.1520
$451	0.1857	1.8961
$1,165	0.2782	43.6900
$1,485	0.2760	41.1734
$3,889	0.3120	94.6542
$3,889 and over	0.3920	405.8080

To work out withholding amounts using the formulas, you must:

Ignore any cents, multiply the per performance earnings by the number of performances for the week to derive the weekly equivalent. Add 99 cents to the result.
Calculate the weekly amount by applying the relevant coefficients from table A or B above, rounding to the nearest dollar.
Divide this amount by the number of performances for the week to work out the per performance withholding amount. Multiply this amount by the number of performances per day to convert it to the daily earnings equivalent. Round the daily withholding amount to the nearest dollar.

If you pay your employees daily rather than per performance, the amount to withhold (including reductions for tax offsets) should be worked out on a daily basis.

Example

Sandra has two performances for the week, one on Thursday and one on Saturday. Sandra earns $500.35 for each performance. She has claimed the tax-free threshold.

$500 × 2 = $1,000. Add 99 cents to the result = $1,000.99.
$1,000.99 × 0.2782 – 165.4431 = $113.0323. Round to the nearest dollar = $113.
$113 ÷ 2 = $56.50. Round to the nearest dollar = $57.

Therefore, the amount to withhold from each performance is $57. As there is only one performance per day, the daily withholding amount is the same as the per performance withholding amount.

Accounting software

Software written in accordance with the formulas in this table should be tested for accuracy against the Withholding look-up tool. The results obtained when using the coefficients in this table may differ slightly from the Withholding look-up tool. The differences result from the rounding of components.

Tax file number (TFN) declarations

The answers your employees provide on their Tax file number declaration determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from an employee, it will override the previous one.

If an employee does not give you a valid Tax file number declaration within 14 days of starting an employer/employee relationship, you must complete Tax file number declaration with all available details of the employee and send it to us.

When a TFN has not been provided

You must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents), if all of the following apply:

■they have not quoted their TFN
■they have not claimed an exemption from quoting their TFN
■they have not advised you that they have applied for a TFN or have made an enquiry with us.

If an employee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals (NAT 1432) with us, they have 28 days to provide you with their TFN.

If an employee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) unless we tell you not to.

Do not allow for any tax offsets or Medicare levy adjustment. Do not withhold any amount for:

■Higher Education Loan Program (HELP) debts
■Trade Support Loan (TSL) debts
■Financial Supplement debts.

Claiming tax offsets

If your employee chooses to claim their entitlement to a tax offset through reduced withholding, they must provide you with a Withholding declaration (NAT 3093).

If your employee claims a tax offset, reduce the amount to be withheld from their earnings per performance by the value of the tax offset. The per performance value is the tax offset amount claimed divided by 52, divided by the number of performances per week. Round to the nearest dollar.

Do not allow for any tax offsets if any of the following apply:

■when no TFN has been provided
■you are using foreign resident rates
■the payee has not claimed the tax-free threshold.

Withholding declarations

An employee may use a Withholding declaration (NAT 3093) to advise you of a tax offset they choose to claim through reduced withholding from you. For more information, see Claiming tax offsets.

Employees can also use a Withholding declaration to advise you of any changes to their situation that may affect the amount you need to withhold from their payments.

Changes that may affect the amount you need to withhold include:

■becoming or ceasing to be an Australian resident for tax purposes
■claiming or discontinuing a claim for the tax-free threshold
■advising of a HELP, TSL or Financial Supplement debt, or changes to them.

When your employee provides you with a Withholding declaration it will take effect from the next payment you make. If you receive an updated declaration from an employee, it will replace the previous one.

An employee must have provided you with a valid Tax file number declaration before they can provide you with a Withholding declaration.

When your employee is a foreign resident

If your employee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

There are two ways you can withhold from a foreign resident’s earnings:

■if they have not given you a valid TFN, you need to withhold 47% for each $1 of earnings (ignoring any cents).
■if they have given you a valid TFN, you need to withhold the amount calculated using the foreign resident tax rates, rounding any cents to the nearest dollar.

Foreign resident tax rates

Weekly earnings $	Weekly rate
0 to 1,538	32.5 cents for each dollar of earnings
1,539 to 3,462	$500 plus 37 cents for each $1 of earnings over $1,538
3,463 and over	$1,212 plus 47 cents for each $1 of earnings over $3,462

Foreign residents cannot claim tax offsets to reduce withholding. They may, in limited circumstances, be entitled to claim a zone or overseas forces offset in their income tax return. If your foreign resident employee has claimed a tax offset on the Tax file number declaration, you don’t need to make any adjustments to the amount you withhold.

Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments

For payments made on or after 1 July 2015

Withholding limit

There is a withholding limit of 49% on tax withheld from any additional payments calculated using an annualised method.

Applying this withholding limit may result in withholding not being sufficient to cover some employees' end of year tax liability. In these situations, an employee can ask their employer to increase their withholding for the remainder of the financial year.

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953. It applies to certain withholding payments covered by Subdivisions 12-B (except sections 12-50 and 12-55), 12-C (except sections 12-85 and 12-90) and 12-D of Schedule 1 paid as a lump sum.

Using this table

Use this table if you make a payment of salary or wages which is:

■a back payment (including lump sum payments in arrears)
■a commission
■a bonus or similar payment.

Other payments you should use this tax table for

These payments include back payments of:

■compensation or sickness or accident payments for an incapacity for work that are not tax exempt
■Australian Government education or training payments – for example, Austudy or ABSTUDY
■assessable pensions, benefits and allowances under the Social Security Act 1991 or the Veterans’ Entitlements Act 1986, or similar payments made under a law of a foreign country, state or province.

Back payments (including lump sums in arrears)

A back payment is a payment that was meant to have been made in a prior period. For example:

■your employee’s wages were underpaid due to an error or oversight
■an allowance you were due to pay in July was overlooked and you made the payment in December.

A back payment is distinct from a bonus, which is a payment made for recognition of performance including past performance. A bonus (or similar payment) can only be considered a back payment if you paid the bonus later than the time that it should have been paid.

If you normally process payments in a pay period later than the work is performed, for example, overtime payments paid with a time lag of one pay period, they are not considered back payments. These payments are treated as part of the normal pay cycle when paid and withholding is calculated on total earnings for that period. An overtime payment is only considered a back payment if it was meant to have been made in a prior pay period.

Commissions

Commissions are typically payments made as recognition of performance or service, and may be calculated as a percentage of the proceeds from a particular transaction or series of transactions.

Bonuses and similar payments

A bonus is usually made to an employee in recognition of performance or services, and may be calculated as a percentage of the proceeds from a particular business transaction. These payments may not necessarily be related to a particular period of work.

A payment will be treated as similar to a bonus if it is an amount of a one-off nature that does not relate to work performed in a particular period. Examples include:

■a once-only payment made to a payee as compensation for a changed work location
■an amount paid as a sign-on bonus to a payee entering a workplace agreement
■any lump sum allowance.

Leave loading

Payment of leave loading can also be regarded as a payment similar to a bonus, if it is made as a lump sum and not on a pro rata basis as leave is taken. If you pay leave loading on a pro rata basis, add it to earnings for the period to calculate withholding using the standard tax tables.

Tax file number (TFN) declarations

The answers your employees provide on their Tax file number declaration (NAT 3092) determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from an employee, it will override the previous one.

If an employee does not give you a valid Tax file number declaration within 14 days of starting an employer/employee relationship, you must complete a Tax file number declaration with all available details of the employee and send it to us.

When a TFN has not been provided

You must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) if all of the following apply:

■they have not quoted their TFN
■they have not claimed an exemption from quoting their TFN
■they have not advised you that they have applied for a TFN or have made an enquiry with us.

If an employee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for Individuals (NAT 1432) with us, they have 28 days to provide you with their TFN.

If the employee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) unless we tell you not to.

Do not allow for tax offsets or Medicare levy adjustment. Do not withhold any amount for:

■Higher Education Loan Program (HELP) debts
■Trade Support Loan (TSL) debts
■Financial Supplement debts.

Terms we use

Additional payments

Additional payments include back payments (including lump sum payments in arrears), commissions, bonuses and similar payments.

Normal earnings

Normal earnings are gross taxable earnings and include all salary and wage income, taxable allowances, and overtime earnings for the current financial year. This includes any back payments previously made using Method B(i).

At the start of a financial year, an employee’s normal earnings can be based on the last full pay period worked in the previous financial year.

If an employee’s pay fluctuates significantly, you can use an average of gross taxable earnings for the current financial year (or, if applicable, the previous financial year).

If an employee has no current or past normal earnings (for example, the employee is newly employed), you can include expected future earnings in your calculations. This can be based on the employee’s contracted or expected salary for the financial year.

For the purposes of this table, normal earnings do not include employment termination payments or unused leave payments made on termination of employment.

Average total earnings

Average total earnings are the sum of all normal earnings paid in the current financial year, including current pay, plus any current year back payments if Method B(i) is used to calculate withholding. Then divide the total earnings by the number of pay periods to date (including the current pay period).

Pay periods per financial year

Pay periods per financial year refers to a total of 52 pay periods if paid weekly, 26 pay periods if paid fortnightly or 12 pay periods if paid monthly. No adjustments are required for a 53 week / 27 fortnight year.

Withholding limit

If your employee has a Higher Education Loan Program (HELP), Trade Support Loan (TSL) or Financial Supplement debt, see HELP, TSL, SFSS and additional payments.

If you use Method A or Method B(ii), the amount of tax to be withheld from an additional payment is limited to a maximum of 49% of the additional payment. If the withholding amount calculated (including a HELP, TSL or Financial Supplement component) using Method A or Method B(ii) exceeds 49% of the additional payment being made, then the amount is reduced to be equal to 49% of that payment. The withholding limit applies to the additional payment only and not to normal earnings for the current pay period.

For some employees, the withholding limit may result in their withholding amounts not being sufficient to cover their end-of-year tax liability, as their total earnings for the financial year may exceed the HELP, TSL or Financial Supplement repayment threshold or attract a higher rate of tax. Under these circumstances, your employee can arrange an upwards variation by entering into an agreement with you to vary the rate or amount of withholding.

For more information about withholding variations, refer to:

■For employers: PAYG withholding variations for payers
■For employees: PAYG withholding - varying your PAYG withholding.

For more information about HELP, TSL and Financial Supplement repayment thresholds, refer to:

■HELP, TSL and SFSS repayment thresholds and rates.

Working out the withholding amount

To work out the amount you need to withhold from an additional payment, you must use either Method A or Method B.

Using Method B is more complex but produces a withholding amount that more closely approximates the actual tax payable.

Calculations made using either method are acceptable to work out the withholding amount. If your calculation using either method results in a negative amount, you treat the result as nil.

Using Method A

Use this method for any additional payments made regardless of the financial year the additional payment applies to. This includes all back payments, commissions, bonuses or similar payments.

This method calculates withholding by apportioning additional payments made in the current pay period over the number of pay periods in a financial year, and applying that average amount to the gross earnings in the current pay period.

If you are paying a commission, bonus or similar payment for a defined period of less than 12 months, you can choose to calculate withholding by using the number of pay periods the payment relates to at step 3. For example, if a commission relates to four weeks and the employee is paid weekly, you divide the commission by four pay periods at step 3, rather than 52 pay periods.

Step	Instruction
1	Work out your employee’s gross earnings excluding any additional payments for the current pay period. Ignore any cents.
2	Use the relevant tax table to find the amount to be withheld from your employee’s gross earnings in step 1.
3	Add any additional payments to be made in the current pay period together and divide the total by the number of pay periods in the financial year (that is, 52 weekly pay periods, 26 fortnightly pay periods or 12 monthly pay periods). Ignore any cents.
4	Add the amount at step 3 to the gross earnings at step 1.
5	Use the relevant tax table to find the amount to be withheld from the amount at step 4.
6	Subtract the amount at step 2 from the amount at step 5.
7	Multiply the amount at step 6 by the number of pay periods used in step 3.
8	Multiply the additional payment being made in the current pay period by 49%.
9	Use the lesser amount of step 7 and step 8 for the withholding on the additional payment. Ignore any cents.
10	Work out the total PAYG withholding for the current pay period by adding the withholding on the additional payment (step 9) to the withholding on the gross earnings (step 2).

Additional information

Low rate cap: For the 2016-17 income year, the low rate cap is $195,000 and is indexed annually. The low rate cap is:

■in relation to super lump sums paid to an individual who has reached their preservation age, the maximum amount of the taxable component that is allowed the lowest rate of tax
■a lifetime limit
■allocated to the taxed element first before allocating the remaining low rate cap to the untaxed element.

Untaxed plan cap: For the 2016-17 income year, the untaxed plan cap is $1,415,000 and is indexed annually. For the low rate cap or the untaxed plan cap in prior years, phone us on 13 10 20 or visit Super.

Lump sum less than $200: There is no withholding required from the whole amount if it is paid by a regulated super fund, complying ADF or RSA provider as a super lump sum and it is the payee’s entire benefit.

A terminal medical condition exists if:

■two registered medical practitioners have certified, jointly or separately, that the member suffers from an illness, or has incurred an injury, that is likely to result in the member's death within 24 months of the date of certification
■at least one of the registered medical practitioners is a specialist practicing in an area related to the member's illness or injury
■the certification period has not ended for each of the certificates.

The certification period is 24 months from the date of certification.

A death benefit dependant for taxation purposes includes:

■spouse of the deceased
■child of the deceased under 18 years old
■a person who had an interdependency relationship with the deceased
■a person who was a dependant of the deceased just before the latter died
■any individual who is paid a lump sum death benefit if the deceased died in the line of duty as a member of the defence force, a member of the Australian Federal Police or the police force of a state or territory, or a protective service officer (as defined in the Australian Federal Police Act 1979).

A spouse of the deceased includes another person (of any sex) who:

■was in a relationship with the deceased that was registered under a law of a prescribed state or territory
■lived with the deceased on a genuine domestic basis in a relationship as a couple, although not legally married.

A child of the deceased includes:

■an adopted child, stepchild or ex-nuptial child
■a child of the deceased's spouse
■a child of the deceased within the meaning defined in the Family Law Act 1975 (for example, somebody who is considered to be a child of a person under a state or territory court order giving effect to a surrogacy agreement).

An interdependency relationship includes:

■a close personal relationship between two people who live together, where one or both provides for the financial and domestic support and personal care of the other
■a close personal relationship between two people who live together but do not satisfy one or more of the requirements mentioned in the previous dot point due to either or both of them suffering from a physical, intellectual or psychiatric disability.

For further information on interdependency relationships and before accepting that a person is financially dependent, phone us on 13 10 20.

Rounding of withholding amounts

Withholding amounts calculated by applying this table are rounded to the nearest dollar. Results of 50 cents or higher are rounded upwards. If a TFN is not provided, ignore cents when calculating withholding amounts.

Example

Super lump sum made by a super provider from a taxed element.

Heather and Dean are members of the AAFund super fund. They are 56 and 61 years old respectively. They have decided to retire and take some of their super as a lump sum. The preservation age for both of them is 55.

According to their entitlements, Heather and Dean will both receive a super lump sum of $250,000 from AAFund. Each super lump sum has a tax-free component of $30,000 and a taxable component of $220,000. Heather and Dean have previously provided their respective TFNs to AAFund.

AAFund does not need to withhold from the tax-free component of $30,000, but must withhold an amount from the taxable component of $220,000. The taxable component of the super lump sum paid by AAFund is wholly made up of taxed elements.

Amount to withhold for Heather:
As Heather is over her preservation age but is still under 60, she is entitled to the low rate cap.

Amount up to low rate cap = $195,000 (2016-17 income year cap amount)
Amount above low rate cap = $25,000 ($220,000 – $195,000)
Amount to withhold from $25,000 = $4,250 (17% of $25,000)

Note: The low rate cap is indexed annually.

Amount to withhold for Dean:
As Dean is over 60 years old, no part of his super lump sum payment is subject to withholding.

Preservation age

The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

Preservation age is determined using your payee’s date of birth. For example, if a member was born on 1 October 1960, they will reach their preservation age of 56 on 1 October 2016. The table below will help with this:

§ Date of birth	§ Preservation age
Before 1/7/1960	55
1/7/1960–30/6/1961	56
1/7/1961–30/6/1962	57
1/7/1962–30/6/1963	58
1/7/1963–30/6/1964	59
After 30/6/1964	60

Payment summaries

You must provide a PAYG payment summary – superannuation lump sum to the recipient of the super lump sum within 14 days of making a lump sum payment.

Payment summaries can also be printed using software that conforms with ATO reporting specifications.

For information and reporting specifications visit Software developers.

Schedule 13 – Tax table for superannuation income streams

For payments made on or after 1 July 2016

This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-80(a) of Schedule 1 to the TAA.

Using this table

You should use this table if you make a payment of a super income stream, including a:

■transition to retirement income stream
■temporary or permanent disability income stream
■super death benefit income stream to a dependant.

Super income streams

A super income stream is a series of regular payments from a super fund when the member has satisfied a condition of release. These regular payments can be paid weekly, fortnightly, monthly, quarterly or annually.

The following payments are not super income stream payments:

■commutation of an income stream; this is a super lump sum
■an amount paid which the member elected to be treated as a super lump sum prior to the payment being made from the income stream.

See also:

■Conditions of release
■Taxation Ruling TR 2013/5: When a super income stream commences and ceases for further information on starting and stopping an income stream
■Tax table for superannuation lump sums to work out the amount to withhold from super lump sums.

Components of a super income stream

Before you can work out the withholding amount, you must calculate the components of the super income stream.

A super income stream may have two components:

■the tax-free component
■taxable component which can include either or both of an
–element taxed in the fund (taxed element)
–element untaxed in the fund (untaxed element).

You do not withhold from the tax-free component.

Tax file number (TFN) declarations

The answers your payees provide on their Tax file number declaration determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from a payee, it will override the previous one.

If a payee does not give you a valid Tax file number declaration within 14 days of starting a payer/payee relationship, you must complete a Tax file number declaration with all available details of the payee and send it to us.

When a TFN has not been provided

You must withhold 49% for residents and 47% for foreign residents from the taxable component (ignoring any cents), if a super income stream payment is made to your payee and all of the following apply:

■they have not quoted their TFN
■they have not claimed an exemption from quoting their TFN
■they have not advised you that they have applied for a TFN or have made an enquiry with us.

However, if your payee is 60 years old or above, you can only withhold from the untaxed element of the taxable component.

If a payee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals with us, they have 28 days to provide you with their TFN.

If the payee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident payee and 47% from a foreign resident payee from the relevant element(s) of the taxable component of the super income stream payment (ignoring any cents) unless we tell you not to.

Do not allow for any tax offsets or Medicare levy adjustments. Do not withhold any amount for:

■Higher Education Loan Program (HELP) debts
■Student Start-up Loan (SSL) debts
■Trade Support Loan (TSL) debts
■Financial Supplement debts.

Working out the withholding amount

Factors to consider when working out the withholding amount include:

■whether the payee is an Australian resident or foreign resident for tax purposes
■the age of the payee
■the frequency of the income stream payments – for example, fortnightly, monthly
■whether the payee is claiming the tax-free threshold
■whether the payee is claiming the seniors and pensioners tax offset
■whether the income stream includes an untaxed element (generally payments from state and Commonwealth public sector super schemes)
■whether the income stream is a death benefit income stream

Payments to Australian residents

This table is divided into three parts. The amount required to be withheld from the taxable component of a super income stream can be calculated using the following:

■the taxable component is comprised wholly of a taxed element – use part A
■the taxable component contains an untaxed element – use part B
■the payment is a super death benefit income stream – use part C.

Payments to foreign residents

If the income stream is to be made to a foreign resident, you will need to check if there is a tax treaty with their country of residence. If the super income stream is assessable in the other country because of the treaty, no withholding is required.

If a foreign resident's income stream is assessable in Australia, you are required to withhold from the payment.

See also:

■The full list of Australian Tax Treaties, as maintained by Treasury
■What are tax treaties?

Rounding of withholding amounts

Withholding amounts calculated using formulas should be rounded to the nearest dollar. Results ending in exactly 50 cents are rounded to the next higher dollar. Do this rounding directly, that is, do not make a preliminary rounding to the nearest cent. Where no TFN has been provided, cents are ignored when withholding amounts are calculated.

Withholding amounts calculated using formulas should be rounded to the nearest dollar. Results ending in exactly 50 cents are rounded to the next highest dollar. Do this rounding directly; do not make a preliminary rounding to the nearest cent. Where no TFN has been provided, cents are ignored when withholding amounts are calculated.

Part A: Taxable component is comprised wholly of a taxed element

Step 1 Use the following table to work out whether the taxed element of the taxable component is subject to withholding. If the taxable component contains an untaxed element, go to part B.

Age	Withholding applies to:
Below 60 years	Taxed element
60 years and over	No withholding

If your payee is 60 years of age or over, no withholding is required from the taxed element.

If your payee is less than 60 years of age, go to step 2.

Step 2 Use the appropriate PAYG withholding tax table to calculate the withholding amount relevant to the amount worked out at step 1. The tax table you use depends on the period the income stream covers – that is, weekly, fortnightly or monthly payments.

Step 3 Some payees may be eligible for a tax offset. Use the following table to calculate the tax offset amount.

Super income stream – taxed element

Age	Tax offset
Below preservation age	Nil
Preservation age to below 60 years	Taxed element × 15%

Disability super income stream – taxed element

Age	Tax offset
Below preservation age	Taxed element × 15%
Preservation age to below 60 years	Taxed element × 15%

See also:

Preservation age

Step 4 For some payees, the application of the offset from step 3 leads to under withholding for their Medicare levy. An offset adjustment is required. Use the applicable formulas below to calculate the offset adjustment amount (you will need to calculate the weekly equivalent of the taxable component if making fortnightly, monthly or quarterly payments).

Adjustment amounts per taxable component amount

Taxable component amount (on a weekly basis)	Offset adjustment amount
Less than the Medicare levy threshold for singles	Nil
Greater than the Medicare levy threshold for singles, but less than the Medicare levy shade out point (SOP) for singles	(Taxable component - Medicare levy threshold for singles) x 0.10
Greater than or equal to the Medicare levy SOP for singles, but less than $934	Taxable component x 0.02
Greater than $933	Nil

Medicare levy parameters are contained in Statement of formulas for calculating amounts to be withheld.

Step 5 Calculate the notional amount to withhold by first subtracting the tax offset per payment (step 3) from the withholding amount (step 2).

Notional amount to withhold = withholding amount – tax offset

Then compare the notional amount to withhold with the offset adjustment amount calculated at step 4.

If the notional amount to withhold is:

■less than the amount calculated at step 4, withhold the amount calculated at step 4
■more than the amount calculated at step 4, withhold the notional amount to be withheld.

Examples

These examples use the PAYG withholding tax tables that apply from 1 July 2015.

Case A: Taxable component comprised wholly of a taxed element

Example 1

Courtney is 61 and is receiving a fortnightly super income stream of $1,000.

The tax-free component of Courtney’s fortnightly super income stream is $200.

The taxable component of the super income stream is $800.

As Courtney is over 60 years old and her taxable component is comprised wholly of a taxed element, no withholding is required.

Example 2

Maree is 56 and is receiving a fortnightly super income stream of $1,200. Maree’s preservation age is 55.

The tax-free component of Maree’s fortnightly super income stream is $300. The taxable component of Maree’s super income stream is $900.

Step 1: As Maree is 56, withholding applies to the taxable component.

Step 2: As Maree is paid fortnightly, use the Fortnightly tax table to work out the withholding required from the $900 taxed element. This amount is $48, assuming that Maree is claiming the tax-free threshold.

Step 3: Maree is entitled to a tax offset.

Tax offset = taxed element x 15%

= $900 x 15%

= $135

Step 4: Calculate Maree’s fortnightly offset adjustment amount. As Maree’s fortnightly payment is more than $790 (the Medicare levy threshold for singles, on a fortnightly basis) but less than $986 (the Medicare levy SOP for singles, on a fortnightly basis), her offset adjustment amount is calculated as:

Offset adjustment amount = (Taxable component - Medicare levy threshold for singles) x 0.10

= ($900 – $790) x 0.10

= $11.00

= $11 per fortnight (rounded to the nearest dollar)

Maree’s offset adjustment amount is $11 per fortnight.

Step 5: To calculate the notional withholding amount, reduce the withholding amount ($48 as worked out in step 2) by the value of the tax offset ($135 as worked out in step 3). That is:

Notional withholding amount = $48 – $135

= -$87

Since the notional withholding amount is negative and less than the offset adjustment amount, the amount to be withheld from Maree’s fortnightly super income stream is $11. This is the offset adjustment amount which will cover the Medicare levy payable.

Part B: Taxable component contains an untaxed element

Step 1 Use the following table to work out which elements of the taxable component are subject to withholding.

How to apply withholding when taxable component contains untaxed element

Age	Taxable component of super income stream contains		Withholding applies to the following amount(s)
Age	Untaxed element	Taxed element	Withholding applies to the following amount(s)
Below preservation age	Yes	Yes	Sum of untaxed and taxed elements
	No	Yes	Taxed element
	Yes	No	Untaxed element
Preservation age to below 60 years	Yes	Yes	Sum of untaxed and taxed elements
	No	Yes	Taxed element
	Yes	No	Untaxed element
60 years and over	Yes	Yes	Untaxed element
	No	Yes	No withholding
	Yes	No	Untaxed element

Step 2 Use the appropriate PAYG withholding tax table to calculate the withholding amount relevant to the amount worked out in step 1. The tax table you use depends on the period the income stream covers – that is, weekly, fortnightly or monthly.

Note: Some payees may be eligible to claim the seniors and pensioners tax offset (SAPTO). If the payee gives you a Withholding declaration indicating they want to claim a SAPTO entitlement through PAYG withholding, you should use the Tax table for seniors and pensioners to work out the amount to withhold from the amount calculated in step 1.

Step 3 Some payees may be eligible for a tax offset. Use the following table to work out the tax offset amount for the payee.

Super income stream – taxable component

Age	Tax offset
Below preservation age	Nil
Preservation age to below 60 years	Taxed element × 15% Untaxed element - Nil
60 years and over	Untaxed element x 10%

Disability super income stream – taxable component

Age	Tax offset
Below preservation age	Taxed element × 15% Untaxed element - Nil
Preservation age to below 60 years	Taxed element × 15% Untaxed element - Nil
60 years and over	Untaxed element x 10%

Step 4 Work out the amount to withhold by subtracting the tax offset per payment (step 3) from the withholding amount (step 2).

Amount to withhold = withholding amount – tax offset

If the tax offset amount is greater than the withholding amount, the amount to withhold is nil.

Example

This example uses the PAYG withholding tax tables that apply from 1 July 2015.

Case B: Taxable component comprises a taxed element and an untaxed element

Ralph is 63 and receives a fortnightly super income stream of $3,000.

The tax-free component of Ralph’s fortnightly super income stream is $900. The taxable component of his super income stream is $2,100.

Step 1: Ralph’s $2,100 taxable component is comprised of a $600 taxed element and a $1,500 untaxed element. As Ralph is over 60 years old, no withholding will apply to the taxed element. Withholding will apply to the $1,500 untaxed element.

Step 2: Using the Fortnightly tax table, work out the withholding required from the $1,500 untaxed element. This is $192, assuming that Ralph is claiming the tax-free threshold.

Step 3: Ralph is entitled to a tax offset.

Tax offset = untaxed element x 10%

= $1,500 x 10%

= $150

Step 4: Reduce the withholding amount ($192 as worked out in step 2) by the value of the tax offset ($150).

Final withholding amount = withholding amount less tax offset

= $192 – $150

= $42

Part C: Payment is a super death benefit income stream

Step 1 Use the following table to work out which elements of the taxable component are subject to withholding.

Super death benefit paid to a dependant1

Age of deceased	Age of recipient	Taxable component of super death benefit income stream contains		Withholding applies to the following amount(s)
Age of deceased	Age of recipient	Untaxed element	Taxed element	Withholding applies to the following amount(s)
Below 60 years	Below 60 years	Yes	Yes	Sum of untaxed and taxed elements
		Yes	No	Untaxed element
		No	Yes	Taxed element
	60 years and over	Yes	Yes	Untaxed element
		Yes	No	Untaxed element
		No	Yes	No withholding
60 years and over	Yes	Yes	Untaxed element
	Yes	No	Untaxed element
	No	Yes	No withholding

1 Dependants include all children of the deceased under the age of 18, any spouse of the deceased (including a former spouse and a current or former de facto spouse) and any person with whom the deceased had an interdependency relationship. An interdependency relationship includes a close personal relationship between two people who live together, where one or both provides for the financial and domestic support and personal care of the other. A dependant can also be a person who was financially dependent on the deceased. Before accepting that a person is financially dependent, phone us on 13 10 20.

Step 2 Use the appropriate PAYG withholding tax table to calculate the withholding amount relevant to the amount worked out in step 1. The tax table you use depends on the period the income stream covers – that is, weekly, fortnightly or monthly.

Note: Some payees may be eligible to claim the SAPTO. If the payee gives you a Withholding declaration indicating they want to claim a SAPTO entitlement through PAYG withholding, you should use the Tax table for seniors and pensioners to work out the amount to withhold from the amount calculated in step 1.

Step 3 Some super income streams may be eligible for a tax offset. Use the following table to work out the tax offset amount for the payee.

Super death benefits paid to a dependant

Age of deceased	Age of recipient	Tax offset
Below 60 years	Below 60 years	Taxed element x 15% Untaxed element - Nil
Below 60 years	60 years and over	Untaxed element × 10%
60 years and over	Any age	Untaxed element x 10%

Step 4 Work out the amount to withhold by subtracting the tax offset per payment (step 3) from the withholding amount (step 2).

Amount to withhold = withholding amount – tax offset

If the tax offset amount is greater than the withholding amount, the amount to withhold is nil.

Super death benefits paid to a non-dependant

A person who is not a dependant of the deceased is not able to receive a super income stream. A super death benefit income stream that was being paid to a non-dependant prior to 1 July 2007 is taxed in the same manner as a super death benefit income stream paid to a dependant.

Example

This example uses the PAYG withholding tax tables that apply from 1 July 2015.

Case C: Super death benefit income stream where the taxable component comprises a taxed element and an untaxed element

Harriet is 58 and her husband, also 58, dies in July 2015. As a result of her husband’s death, Harriet receives a fortnightly super death benefit income stream of $2,000.

The tax-free component of Harriet’s super death benefit income stream is $400. The taxable component of Harriet’s super death benefit income stream is $1,600.

Step 1: Harriet’s $1,600 taxable component is comprised of a $600 taxed element and a $1,000 untaxed element. As Harriet is 58 and her husband was also under 60, withholding will apply to the full taxable component.

Step 2: Using the Fortnightly tax table, work out the withholding required from the $1,600 taxable component. This is $226, assuming that Harriet is claiming the tax-free threshold.

Step 3: Harriet is entitled to a tax offset.

Tax offset = taxed element x 15%

= $600 x 15%

= $90

Step 4: Reduce the withholding amount ($226 as worked out in step 2) by the value of the tax offset ($90).

Final withholding amount = withholding amount less tax offset

= $226 – $90

= $136

Preservation age

The withholding amount varies depending on whether the payee has reached their preservation age when the payment is made.

Preservation age is determined using your payee’s date of birth. For example, if a member was born on 1 October 1960, they will reach their preservation age of 56 on 1 October 2016. The table below will help with this:

Preservation age by date of birth range

Date of birth	Preservation age
Before 1/7/1960	55
1/7/1960–30/6/1961	56
1/7/1961–30/6/1962	57
1/7/1962–30/6/1963	58
1/7/1963–30/6/1964	59
After 30/6/1964	60

Payment summaries

You must issue a PAYG payment summary – superannuation income stream to the member for the total of the payments made in the income year. This must be provided by 14 July. This date may be earlier if the member requests it.

Payment summaries can also be printed using software that conforms with ATO reporting specifications.

See also:

■Payment summary information and reporting specifications on our Software developers website

Actions

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Citations

Taxation Administration Act Withholding Schedules 2016 (Cth)

Cases Citing This Decision

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Cases Cited

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Statutory Material Cited

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Schedule number	Quick code number	Title
1	45521	Statement of formulas for calculating amounts to be withheld
2	45522	Tax table for individuals employed in the horticultural or shearing industry
3	45523	Tax table for actors, variety artists and other entertainers
5	45524	Tax table for back payments, commissions, bonuses and similar payments
6	45525	Tax table for annuities
7	46069	Tax table for unused leave payments on termination of employment
8	48738	Statement of formulas for calculating HELP, SSL, TSL and SFSS components
9	45527	Tax table for seniors and pensioners
11	48968	Tax table for employment termination payments
12	48969	Tax table for superannuation lump sums
13	48970	Tax table for superannuation income streams