Taxation Administration Act Withholding Schedules 2019

Administered by Department of the Treasury

Legislation au F2019L00894 Not in force Legislative Instrument

Legislation content

Explanatory Statement

 

TAXATION ADMINISTRATION ACT

WITHHOLDING SCHEDULES 2019

 

 

General Outline of Instrument

  1. This instrument is made under section 15-25 of Schedule 1 to the Taxation Administration Act 1953 (TAA).
  2. The instrument makes the withholding schedules, specifying the amount, formulas and procedures to be used for working out the amount required to be withheld by an entity under the pay as you go (PAYG) system.
  3. The instrument contains eleven withholding schedules. Each schedule provides information for calculating the withholding amount, taking into account the particular circumstances presented in the schedule.
  4. This instrument repeals and replaces legislative instrument Taxation Administration Act Withholding Schedules 2018 – F2018L00973, registered on 29 June 2018.
  5. Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations or by-laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument.
  6. This is a legislative instrument for the purposes of the Legislation Act 2003.

 

Date of effect

7.      The instrument commences on 1 July 2019.

 

What is this instrument about

8.      These schedules set out the amounts, formulas and procedures to be used for calculating the amount required to be withheld by entities from withholding payments. The withholding schedules facilitate the collection of income tax, Medicare levy, Higher Education Loan Program, Student Start-up Loans, Trade Support Loans and Financial Supplement repayments.

9.      Schedule 8 is being updated in response to the changes to various study and training support loan repayment arrangements. It replaces the current repayment thresholds and repayment rates with new ones, including a new minimum repayment threshold and repayment rate plus additional repayment thresholds and rates.

10.  There are no updates to the remaining ten schedules which will continue to apply from 1 July 2019.

11.  The purpose of this instrument is to provide certainty to payers about withholding correct amounts of tax on behalf of their payees, which then assists payees to meet their annual income tax liability. Payers are required to withhold and pay amounts of income earned by payees, at regular intervals, as it is earned during the year. The system for collecting these amounts is called the PAYG withholding system.

 

What is the effect of this instrument

12.  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.

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

14.  This instrument also withdraws the earlier version of each affected withholding schedule to provide certainty to PAYG withholding payers with regard to their withholding obligations.

15.  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

16.  The PAYG system, introduced in A New Tax System (Pay As You Go) Act 1999, is a simple and convenient way for individual taxpayers to meet their annual income tax liabilities 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.

17.  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.

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

 

Consultation:

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

20.  Community consultation is not appropriate or reasonably practicable for this instrument. The amended withholding schedules ensure that amounts are withheld in accordance with thresholds which have been indexed according to the applicable legislation.

21.  These schedules ensure that withholding rates will match the tax which will be payable when payees lodge their tax returns.

22.  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.

 

 

 

 

 

 

Legislative references:

Acts Interpretation Act 1901

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

Australian Federal Police Act 1979

Family Law Act 1975

Higher Education Support Act 2003

Human Rights (Parliamentary Scrutiny) Act 2011

Migration Act 1958

Legislation Act 2003

Social Security Act 1991

Student Assistance Act 1973

Taxation Administration Act 1953

Trade Support Loans Act 2014

Veterans’ Entitlements Act 1986

Higher Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018

Education and Other Legislation Amendment (VET Student Loan Debt Separation) Bill 2018


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 Withholding Schedules 2019

 

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 the withholding schedules updated in accordance with the pay as you go (PAYG) system. The schedules provide certainty to payers about withholding correct amounts of tax on behalf of their payees, which then assists payees to meet their annual income tax liability.

 

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. The schedules set out the amounts, formulas and procedures to be used for calculating the amount required to be withheld by entities from withholding payments.

 

Conclusion

 

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

 

 

Overview

The Taxation Administration Act Withholding Schedules 2019, enacted in 2019, addresses the need for up-to-date and accurate withholding schedules under the pay as you go (PAYG) system. This instrument, made under section 15-25 of the Taxation Administration Act 1953, specifies the formulas and procedures to be used for calculating the amount required to be withheld by entities. It replaces the previous withholding schedules from 2018 and aims to provide certainty to payers regarding their obligations in the PAYG system. This instrument ensures that the withholding schedules accurately reflect changes in relevant legislative thresholds and rates, facilitating the collection of income tax, Medicare levy, and various loan repayments. The Australian Parliament enacted this legislation to streamline the PAYG withholding system, ensuring that taxpayers meet their annual obligations as income is earned, thereby preventing large end-of-year tax bills and ensuring the government has the necessary revenue to provide community services.

Scope and Application

The Taxation Administration Act Withholding Schedules 2019 instrument is made under section 15-25 of Schedule 1 to the Taxation Administration Act 1953 and contains eleven withholding schedules that specify the amounts, formulas, and procedures to be used for calculating the amount required to be withheld by entities from withholding payments. This instrument replaces the Taxation Administration Act Withholding Schedules 2018, providing updated information that ensures withholding rates match the tax that will be payable when payees lodge their tax returns. The instrument applies to employers, employees, professional tax advisers, payroll software developers, the Australian Taxation Office, and payroll service providers. It facilitates the collection of income tax, Medicare levy, Higher Education Loan Program, Student Start-up Loans, Trade Support Loans, and Financial Supplement repayments. The instrument repeals the previous withholding schedules to provide certainty to PAYG withholding payers with regard to their withholding obligations. There are no updates to the remaining ten schedules, and the impact of this instrument is expected to be minor in terms of compliance costs. The instrument is of a minor or machinery nature and does not engage any of the applicable rights or freedoms under the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Taxation Administration Act Withholding Schedules 2019 (F2019L00894) sets out the specific amounts, formulas, and procedures required to be used for calculating the tax that entities must withhold under the pay as you go (PAYG) system. This instrument, comprising eleven schedules, specifies the withholding amounts for various types of payments made to individuals and entities, ensuring that the correct amount of tax is withheld and remitted to the Australian Taxation Office (ATO). Each schedule is tailored to the particular circumstances of the payments it covers (sections 16-22). The withholding schedules impose a number of obligations on entities responsible for making payments to individuals or other entities. These entities are required to calculate the correct withholding amount using the specified schedules, and then withhold and remit this amount to the ATO on a regular basis. The schedules provide detailed instructions and formulas to facilitate this calculation, ensuring that taxpayers meet their annual income tax liability as income is earned. Employers, for example, must withhold income tax from their employees’ salaries and wages based on the applicable schedule (section 12). Breach of the withholding requirements can lead to significant consequences. The Taxation Administration Act 1953 (TAA) outlines various offences and penalties for non-compliance. These include both civil and criminal penalties. For instance, under section 288-10 of the TAA, entities that fail to withhold and remit the correct amount of tax can be liable to pay a penalty of up to 100% of the unpaid amount. In more serious cases, directors and officers of entities can be held personally liable for penalties. The maximum penalties for individual offences can reach several thousand dollars, and in some cases, imprisonment may be imposed (section 15-25). The primary aim of this legislative instrument is to provide clarity and certainty to both payers and payees regarding their withholding obligations under the PAYG system. By specifying the precise amounts to be withheld, the schedules help ensure that taxpayers meet their annual income tax liabilities without facing large end-of-year tax bills. This systematic approach aids in maintaining the revenue flow necessary for government services and benefits, while also helping taxpayers manage their tax obligations more effectively throughout the year.

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Area of Law
Taxation Law
Instrument
Legislative Instrument
Concepts
Definitions & Interpretation
Repeal & Amendment
Compliance Obligations

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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.