Taxation Administration Act 1953 - PAYG withholding - Tax tables (15/11/2005)

PAYG withholding – Tax tables

Explanatory Statement

General Outline of Instrument

1. This instrument is made by the Commissioner of Taxation (the Commissioner) pursuant to section 15-25 of Schedule 1 of the Taxation Administration Act 1953 (TAA).
2. The instrument makes publicly available the withholding schedules, which the Commissioner is empowered to make, specifying the formulas and procedures to be used when working out the amount required to be withheld by an entity in accordance with the Pay As You Go (PAYG) system.
3. The instrument contains six (6) Schedules that provide information for calculating the withholding amount taking into account the particular circumstances presented in each Schedule. 
4. This is a legislative instrument for the purposes of the Legislative Instruments Act 2003.

Date of effect

5.      The instrument applies from the commencement date of each of the schedules, being 1 January 2006.

What is this instrument about:

6.      To help taxpayers meet their annual income tax liability, they are required to pay amounts of their income at regular intervals as it is earned during the year. The system for collecting these amounts is called the “Pay As You Go” system.

7.      This instrument provides information on how to work out the amount an entity must withhold from the income of individual taxpayers.  The information is contained in each Schedule to the instrument, also known as the withholding schedules.

What is the effect of this instrument:

8.      The effect of this instrument is to support the PAYG withholding system, which provides a simple and convenient way for most people to meet their annual tax obligations as income is earned.

9.      The people who find the information most useful are employers, professional advisors, software developers, the Australian Taxation Office (ATO) and any other party that may be involved in engaging workers.

Background:

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

Consultation:

11.  No consultation is required in relation to the attached schedules as the schedules, in their previous form, have been operating successfully since the inception of the A New Tax System (ANTS) legislation as of 1st July 2000.  Due to the necessity of the back capture of all instruments in accordance with the Legislative Instruments Act 2003, the ATO has taken the opportunity to ensure the existing schedules meet with Corporate Branding and Style guidelines and to also address some minor matters that have been identified over the past 5 years, by producing the attached updated versions of the schedules.

Legislative references:

Taxation Administration Act 1953

Legislative Instruments Act 200