Taxation Administration Act 1953 - Tax table for back payments, commissions, bonuses and similar payments

Administered by Department of the Treasury

Legislation au F2013L00654 Not in force Legislative Instrument

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Taxation Administration Act 1953 -
Tax table for back payments, commissions, bonuses and similar payments

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 to the Taxation Administration Act 1953 (TAA).
  2. The instrument makes publicly available a withholding schedule, which the Commissioner is empowered to make, specifying the methods to be used for working out the amount required to be withheld by an entity from back payments, commissions, bonuses and similar payments in accordance with the pay as you go (PAYG) system.
  3. In making the instrument, the Commissioner has had regard to the rates of income tax specified in the Income Tax Rates Act 1986.
  4. This is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
  5. This legislative instrument will revoke Legislative Instrument No. F2012L01068 registered on the 24th May 2012.

 

Date of effect

6.     The instrument applies from 1 July 2013.

 

What is this instrument about?

7.     The purpose of this instrument is to help employers and other payers calculate withholding on back payments, commissions, bonuses and similar payments. This will assist taxpayers in meeting their annual income tax liabilities. The system for collecting withholding amounts is called the PAYG system.

8.     This instrument provides information on how to work out the amount an entity must withhold from back payments, commissions, bonuses and similar payments paid to individual taxpayers. The information is contained in the schedule to the instrument. The schedule is also known as a withholding schedule.

9.     The schedule has been revised as a result of community feedback to improve clarity of information on the schedule.

 

What is the effect of this Instrument?

10. 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.

11. The people who find the information most useful are employers, employees, professional advisers, software developers, the Australian Taxation Office, electronic payroll stockists, electronic payroll producers and payroll service providers.

12. 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.

 

Background

13. The PAYG arrangements, introduced in A New Tax System (Pay As You Go) Act 1999, represent the most effective, simple and convenient way for most people to meet their annual income tax liability, either through instalments or withholding, as income is earned. They eliminate large end-of-year tax bills and ensure that Government has the revenue it needs during the year to provide benefits and services 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 amount required to be withheld by an entity. 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 employee or class of payments made.


Consultation

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

17. 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.

 

Erin Holland

Deputy Commissioner of Taxation

Date 5 April 2013

 

 

 

 

Legislative references:

Taxation Administration Act 1953

Legislative Instruments Act 2003

Income Tax Rates Act 1986

A New Tax System (Pay As You Go) Act 1999

Human Rights (Parliamentary Scrutiny) Act 2011

 

 

 


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 tables for back payments, commissions, bonuses and similar payments

 

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 methods to be used for working out amounts required to be withheld for back payments, commissions, bonuses and similar payments in accordance with the pay as you go (PAYG) system.

 

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 is compatible with human rights as it does not raise any human rights issues.

 

 

 

 

 

______________________________________________________________

 

Erin Holland

Deputy Commissioner of Taxation

Date 5 April 2013

 

 

 

Overview

The Taxation Administration Act 1953 (TAA) was enacted to provide a framework for the administration of taxation laws in Australia, ensuring that the revenue collected meets the financial needs of the government. The TAA enables the Commissioner of Taxation to establish and make publicly available withholding schedules that specify the methods for calculating the amount to be withheld from certain payments such as back payments, commissions, bonuses, and similar payments under the PAYG system. This legislative instrument, specifically the Tax table for back payments, commissions, bonuses and similar payments, was introduced to help employers and other payers accurately calculate withholding amounts, thereby assisting taxpayers in meeting their annual income tax liabilities. The instrument was made by the Commissioner of Taxation in accordance with section 15-25 of Schedule 1 to the TAA, taking into account the income tax rates specified in the Income Tax Rates Act 1986. Its purpose is to enhance clarity and accessibility of information for various stakeholders, including employers, employees, and professional advisers, facilitating compliance with the PAYG withholding system.

Scope and Application

The Taxation Administration Act 1953 - Tax table for back payments, commissions, bonuses and similar payments, as outlined in the Explanatory Statement for legislative instrument F2013L00654, is designed to assist employers and other payers in calculating the withholding tax on back payments, commissions, bonuses, and similar payments. The instrument specifies the methods for determining the withholding amounts, ensuring that taxpayers can meet their annual income tax obligations through the PAYG system. This legislative instrument applies to entities making such payments to individual taxpayers in Australia, thereby supporting the PAYG withholding system which facilitates a simple and convenient means of meeting annual tax liabilities as income is earned. The instrument, made by the Commissioner of Taxation, supersedes the previous withholding schedule from 1 July 2013 and is tailored to reflect updated tax rates. The instrument is of a minor or machinery nature, and the impact on compliance costs is deemed to be minor. It is compatible with human rights as it does not engage any applicable rights or freedoms. The Commissioner of Taxation has made this withholding schedule publicly available to aid in the implementation and ongoing compliance of the PAYG system by relevant stakeholders including employers, employees, professional advisers, and software developers.

Key Provisions

The main operative sections of the Taxation Administration Act 1953, as revised by this legislative instrument (section 15-25), pertain to the withholding schedule for back payments, commissions, bonuses, and similar payments. This schedule (F2013L00654) is intended to assist entities in calculating the amount to withhold from these types of payments in accordance with the Pay As You Go (PAYG) system (section 7). The withholding schedule is made publicly available to ensure transparency and ease of access for employers and other payers (section 11). This schedule is particularly useful for employers, employees, professional advisers, software developers, and payroll service providers, among others, who need to calculate and withhold the correct amount of tax from these payments (section 12). Entities governed by this Act are required to adhere to the withholding schedule when calculating the amount of tax to withhold from back payments, commissions, bonuses, and similar payments. This obligation ensures that the correct amount of tax is withheld and remitted to the Australian Taxation Office (ATO) in a timely manner, thus supporting the PAYG withholding system. The withholding schedule provides specific instructions and formulas to be used for these calculations, ensuring consistency and accuracy across different types of payments (section 8). Any breach of the withholding requirements set out in this legislative instrument may result in penalties. While the specific penalties are not detailed in the explanatory statement, the general principles of the Taxation Administration Act 1953 provide for both civil and criminal penalties for non-compliance. Civil penalties may include fines, while criminal penalties could result in imprisonment, depending on the severity and intent of the breach. The ATO is responsible for enforcing these penalties and ensuring compliance with the withholding requirements.

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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.