Taxation Administration Act 1953 - Pay as you go withholding - Tax table for additional amounts to withhold as a result of an agreement to increase withholding

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Legislation au F2014L01665 Not in force Legislative Instrument

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Taxation Administration Act 1953
Tax table for additional amounts to withhold as a result of an agreement to increase withholding

Explanatory Statement

 

General Outline of Instrument

  1. This instrument is made by the Commissioner of Taxation (the Commissioner) under section 15-25 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
  2. The instrument makes a withholding schedule, which the Commissioner is empowered to make, specifying the process to use where a payee wants additional amount(s) to be withheld from their payer under the pay as you go (PAYG) withholding system.
  3. This is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
  4. The withholding schedule in this instrument replaces the schedule which currently applies. This instrument revokes the schedule that will be withdrawn.

 

Date of effect

5.     The instrument applies from 1 February 2015.

 

What is this instrument about?

6.     The purpose of this instrument is to help employers and other payers withhold additional amounts from payments made to a payee when the payee has requested this. 

7.     This instrument outlines the steps required from the employer or other payer and the payee to withhold amounts from payments made, in addition to the amount required under the TAA or the Taxation Administration Regulations 1976. The information is contained in the schedule to the instrument. The schedule is also known as a withholding schedule.  

8.     The withholding schedule has been revised to reduce the administrative burden on employers and other payers and payees, when payees want additional amounts to be withheld from payments made to them. Both parties will no longer be required to complete Withholding declaration upwards variation forms. They can instead use any means that suits their business to agree to withhold additional amounts.

 

What is the effect of this Instrument?

9.     This instrument supports the PAYG withholding system, which provides a simple and convenient way for most people to meet their annual tax obligations as income is earned.

10. A number of groups rely upon the withholding schedules. They include: employers, employees, professional tax advisers, software developers, the Australian Taxation Office, electronic payroll producers and payroll service providers.

11. An assessment of the compliance cost impact indicates that the impact will be minor for both implementation and on-going compliance costs. The new instrument is of a minor or machinery nature.  

12. This ATO initiative supports the Government’s deregulation commitment. Employees and employers will no longer have to complete a complex form to record their agreement to increase the employee’s withholding.  They can instead use any means that suits their business to agree to withhold additional amounts.

 

Background

13. The PAYG system is a simple and convenient way for individual taxpayers to meet their annual income tax either through instalments or through withholding as their income is earned. This system aims to prevent large end-of-year tax bills for individuals. It also ensures that Government has the revenue it needs during the year to provide services and benefits to the community.

14. The TAA empowers the Commissioner to make withholding schedules specifying the amounts, formulas and procedures to be used for working out the amounts required to be withheld by entities. The TAA requires the Commissioner to make each withholding schedule publicly available.

15. Each withholding schedule is tailored to meet the circumstances of a particular class of payee or category of payment.

 

Consultation

16. The making and publication of withholding schedules is a routine part of tax administration.

17. This instrument simplifies the process which applied under the instrument which it replaces.

18. The ATO will provide the necessary information to payroll and software providers, and those employers who code their own in-house payroll systems, to ensure that they have sufficient time to update their software packages.

 

 

 

 

 

 

 

 

Steve Vesperman

Deputy Commissioner of Taxation

Date 2nd December 2014

 

 

Legislative references:

Taxation Administration Act 1953

Legislative Instruments Act 2003

Taxation Administration Regulations 1976

 


Statement of Compatibility with Human Rights

 

This Statement is prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

 

Taxation Administration Act 1953 - Tax table for additional amounts to withhold as a result of an agreement to increase withholding

 

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview

 

This Legislative Instrument makes publicly available a withholding schedule, which specifies the steps to be used for payers and payees to withhold additional amounts under the pay as you go (PAYG) withholding system.

This ATO initiative supports the Government’s deregulation commitment. The new withholding schedule has been updated to reduce the administrative burden on employers and employees, when employees want additional amounts to be withheld from payments made to them. Employers and employees will no longer be required to complete Withholding declaration upwards variation forms. They can instead use their own means to agree to withhold additional amounts.

 

Human rights implications

 

This legislative instrument does not engage any of the applicable rights or freedoms because the new instrument is of a minor or machinery nature.

Conclusion

 

This legislative instrument does not raise any human rights issues.

 

 

 

 

 

______________________________________________________________

 

Steve Vesperman

Deputy Commissioner of Taxation

Date 2nd December 2014

 

 

 

Overview

The Taxation Administration Act 1953, amended by the legislative instrument F2014L01665, addresses the procedural complexities and administrative burden associated with the withholding of additional amounts under the Pay As You Go (PAYG) withholding system. This instrument, made by the Commissioner of Taxation under section 15-25 of Schedule 1 to the Act, provides a revised withholding schedule designed to simplify the process for both employers and employees when additional withholding is requested. Effective from 1 February 2015, it eliminates the need for Withholding declaration upwards variation forms, allowing parties to use alternative means suited to their business needs to agree on additional withholding amounts. This initiative aims to streamline the PAYG system, thereby supporting the government's deregulation efforts and reducing compliance costs. The instrument also ensures the withholding schedule remains publicly available, in line with the requirements of the Taxation Administration Act.

Scope and Application

The Taxation Administration Act 1953 (TAA) provides the Commissioner of Taxation with the authority to issue legislative instruments that support the administration of the PAYG withholding system. This specific instrument, made under section 15-25 of Schedule 1 to the TAA, is designed to facilitate the withholding of additional amounts from payments made to a payee under the PAYG system, in accordance with the payee's request. The instrument applies to employers, employees, professional tax advisers, software developers, the Australian Taxation Office, electronic payroll producers, and payroll service providers who are involved in the PAYG withholding process. The instrument's jurisdictional reach is within the Commonwealth of Australia, impacting entities and individuals who operate under the Australian tax system. The instrument does not introduce new exclusions, exemptions, or thresholds but streamlines the existing process by eliminating the need for Withholding declaration upwards variation forms, allowing parties to use any means suitable for their business to agree on withholding additional amounts. The instrument came into effect from 1 February 2015, replacing the existing withholding schedule. The Commissioner may also extend or restrict the application of this instrument through subordinate instruments, as permitted under the TAA.

Key Provisions

The Taxation Administration Act 1953 (TAA) has been amended through the legislative instrument F2014L01665 to create a new withholding schedule, which is effective from 1 February 2015. This withholding schedule, created under section 15-25 of Schedule 1 of the TAA, outlines the steps for employers and other payers, as well as payees, to withhold additional amounts from payments made under the pay as you go (PAYG) withholding system. This legislative instrument replaces the previous withholding schedule and revokes it upon coming into effect (sections 5 and 12). The purpose of this instrument is to simplify the process for employers and other payers to withhold additional amounts from payments made to payees when such payees request this (sections 6 and 7). The new schedule is designed to reduce the administrative burden by eliminating the requirement to complete Withholding declaration upwards variation forms (section 8). The withholding schedule sets out the obligations for both employers and employees to withhold additional amounts from payments, in addition to the amount required under the TAA or the Taxation Administration Regulations 1976 (section 7). Both parties can now use any means that suits their business to agree to withhold additional amounts, instead of the previously required complex forms (section 8). The PAYG withholding system, which this instrument supports, aims to help taxpayers meet their annual tax obligations in a simple and convenient manner, thus preventing large end-of-year tax bills and ensuring the government has the necessary revenue to provide services and benefits (section 13). The Commissioner is empowered to make withholding schedules, which are tailored to meet the circumstances of a particular class of payee or category of payment, and these schedules must be made publicly available (section 14). There are no specific offences, penalties, or consequences mentioned for breaches of this withholding schedule within the text. However, the overall compliance cost impact is assessed to be minor, and the instrument is of a minor or machinery nature, indicating that it does not engage any applicable rights or freedoms because of its nature (sections 9, 11, and 18). The instrument is compatible with human rights, as it does not raise any human rights issues (section 23).

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.