{"id":"F2026L00251","name":"Taxation Administration (Withholding Variation for Certain Payments to Religious Practitioners) Legislative Instrument 2026","slug":"taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":443191,"registerId":"F2026L00251-fast-fetch-1775958097414","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Taxation Administration (Withholding Variation for Certain Payments to Religious Practitioners) Legislative Instrument 2026","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\ntitle: ATO Legislative Instrument Template\n---\n\n![Commonwealth Coat of Arms of Australia](image.001.jpeg)\n\n \n\nTaxation Administration (Withholding Variation for Certain Payments to Religious Practitioners) Legislative Instrument 2026\n\nI, Will Day, Deputy Commissioner of Taxation, make the following instrument.\n\nDated 12 March 2026\n\nWill Day\n\nDeputy Commissioner of Taxation\n\n \n\nContents\n\n1  Name\n\n2  Commencement\n\n3  Authority\n\n4  Definitions\n\n5  Schedules\n\n6  Variation for payments related to certain allowances\n\n7  Variation for payments related to certain locum services\n\n8  Variation for certain payments related to work or services\n\n9  Payment summary, annual report and Single Touch Payroll reporting exemption\n\nSchedule 1—Repeals\n\nPay as you go withholding – Variation and exemption of withholding requirements for certain payments made to religious practitioners\n\n \n\n1  Name\n\n  This instrument is the Taxation Administration (Withholding Variation for Certain Payments to Religious Practitioners) Legislative Instrument 2026.\n\n2  Commencement\n\n  This instrument commences on the day after it is registered on the Federal Register of Legislation.\n\n3  Authority\n\n  This instrument is made under sections 15-15, 16-153 and 16-180 and subsection 389-10(1) in Schedule 1 to the Act.\n\n4  Definitions\n\nNote: A number of expressions used in this instrument have the same meaning as in Schedule 1 to the Act. Expressions in Schedule 1 to the Act have the same meaning as in the Income Tax Assessment Act 1997 (see section 3AA of the Act). The following expressions are relevantly defined in section 995-1 of the Income Tax Assessment Act 1997:\n\n(a) business kilometres;\n\n(b) car expense;\n\n(c) financial year;\n\n(d) income year;\n\n(e) travel allowance expense;\n\n(f) quarter;\n\n(g) religious practitioner.\n\n  In this instrument:\n\nAct means the Taxation Administration Act 1953.\n\nITAA 1997 means the Income Tax Assessment Act 1997.\n\nlocum services means activities performed by a religious practitioner in temporarily relieving another religious practitioner of their duties.\n\n5  Schedules\n\n  Each instrument that is specified in a Schedule to this instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.\n\n6  Variation for payments related to certain allowances\n\n1.  The amount an entity must withhold from a withholding payment it makes to a religious practitioner under section 12-47 in Schedule 1 to the Act is varied to nil if:\n\n\n (a) the payment relates to an allowance specified in subsection 6(2);\n\n (b) the entity reasonably expects that the religious practitioner will incur deductible work expenses related to the allowance that in total are at least equal to the amount of the allowance; and\n\n (c) the amount and nature of the payment is shown separately in the accounting records of the entity.\n\nNote: Normal withholding rates apply to the part of a payment related to a specified allowance that exceeds a limit specified in subsection 6(2) for that allowance. The normal withholding rates that apply for the financial year relevant to the payment are provided in a legislative instrument made under section 15-25 in Schedule 1 to the Act for that financial year.\n\n (2) The following allowances are specified for the purposes of subsection 6(1):\n\n (a) an allowance for car expenses based on a set rate per kilometre travelled by a car, where:\n\n (i) the allowance is calculated by multiplying the set rate per kilometre by the total number of business kilometres travelled by the car; and\n\n (ii) the set rate used in the calculation does not exceed the rate determined for the income year under subsection 28-25(4) of the ITAA 1997; and\n\n (iii) the total number of business kilometres used in the calculation in respect of which the allowance is paid during the financial year does not exceed the number of business kilometres provided for in subsection 28-25(2) of the ITAA 1997;\n\n (b) an allowance for domestic travel allowance expenses which does not exceed the amount that the Commissioner considers reasonable for the income year for the purposes of section 900 50 of the ITAA 1997;\n\n (c) an allowance for overseas travel allowance expenses which does not exceed the amount that the Commissioner considers reasonable for the income year for the purposes of section 900-55 of the ITAA 1997.\n\n \n\n7  Variation for payments related to certain locum services\n\nThe amount that a religious institution must withhold from a withholding payment it makes to a religious practitioner under section 12-47 in Schedule 1 to the Act is varied to nil where:\n\n (a) the payment relates to locum services performed by the religious practitioner in a quarter; and\n\n (b) the payment relates to days of services in that quarter not exceeding 2; and\n\n (c) the total days of services in that quarter in respect of which the payment and any previous withholding payment were made does not exceed 2.\n\nNote: Normal withholding rates will apply to payments that relate to locum services performed on more than 2 days in any quarter.\n\n \n\n8  Variation for certain payments related to work or services\n\n1.   The amount that an entity must withhold from a withholding payment it makes to a religious practitioner under section 12-47 in Schedule 1 to the Act is varied to nil if:\n\n\n (a) the entity is not a religious institution; and\n\n (b) the payment relates to:\n\n (i) work or services, other than chaplaincy services or counselling services, performed by the religious practitioner; or\n\n (ii) chaplaincy services or counselling services performed by the religious practitioner where that payment does not exceed the relevant amount specified in subsection (2).\n\n (2) For the purposes of subparagraph (1)(b)(ii), the following amounts are specified:\n\n (a) for a payment made on or before 30 June 2026 that is:\n\n (i) made on a weekly basis – $150;\n\n (ii) made on a fortnightly basis – $300;\n\n (iii) made on a monthly basis – $650.\n\n (b) for a payment made on or after 1 July 2026 that is:\n\n (i) made on a weekly basis – $200;\n\n (ii) made on a fortnightly basis – $400;\n\n (iii) made on a monthly basis – $867.\n\n \n\n9  Payment summary, annual report and Single Touch Payroll reporting exemption\n\nAn entity that makes a withholding payment to which section 8 applies is not required, in relation to that payment, to:\n\n (a) issue a payment summary under section 16-155 in Schedule 1 to the Act; or\n\n (b) issue a part year payment summary under section 16-160 in Schedule 1 to the Act; or\n\n (c) report under subsection 16-153(2) in Schedule 1 to the Act; or\n\n (d) notify the Commissioner of amounts required to be notified under section 389-5 in Schedule 1 to the Act.\n\n\n\n\nSchedule 1—Repeals\n\nPay as you go withholding – Variation and exemption of withholding requirements for certain payments made to religious practitioners\n\n1  The whole of the instrument\n\nRepeal the instrument\n","sortOrder":0}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"The instrument appears consistent with its stated purpose of varying withholding requirements for religious practitioners. It replaces a previous instrument (repealed in Schedule 1) with updated thresholds and conditions, but does not appear to have expanded beyond the original scope of regulating PAYG withholding for this specific taxpayer category."},"complexity_factors":["Multiple overlapping conditions across three distinct variation scenarios (sections 6, 7, and 8)","Cross-references to external legislation: Taxation Administration Act 1953 (Schedule 1), Income Tax Assessment Act 1997 (sections 28-25, 900-50, 900-55, 995-1)","Tiered threshold amounts in section 8(2) with different values for weekly/fortnightly/monthly payments and a date-based transition (pre/post 1 July 2026)","Defined terms imported by reference from other Acts rather than defined within the instrument itself","Nested conditions in section 6(2)(a) requiring compliance with three separate sub-conditions for car allowances","Interaction between locum services day counting across multiple payments in section 7(c)","Specific exclusion of certain service types (chaplaincy/counselling) from the general exemption in section 8, subject to monetary caps"],"plain_english_summary":"This instrument cuts withholding obligations for many payments to religious practitioners by making certain work-related allowances, very short locum cover (two days or less per quarter), and most non‑religious‑institution payments (with modest caps for chaplaincy/counselling) exempt from PAYG withholding. Payers also avoid related reporting for the non‑religious‑institution payments.\n\nIt affects religious practitioners, religious institutions and external bodies (schools, hospitals, community groups), reducing compliance for small or irregular payments and replacing an earlier instrument."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"flash_summary":{"complexity_score":6,"scope_assessment":{"changed":true,"description":"This instrument replaces a prior legislative instrument (Schedule 1—Repeals) and redefines when withholding is varied to nil by specifying new categories, numerical caps and time‑dependent amounts (ss6–9). It narrows/targets exemptions to particular allowance types, short locum engagements, and capped payments by non‑religious entities, and removes some reporting obligations for those capped payments (s9)."},"complexity_factors":["Cross‑references to multiple provisions in the Income Tax Assessment Act 1997 (eg. ss 28-25, 900-50, 900-55) create dependency on external thresholds and rates (s6(2)).","Different categories with distinct tests: allowances (s6), locum days with quarterly counting (s7), and work/services with per‑pay period monetary caps that change from 1 July 2026 (s8(1)–(2)).","Entitlement conditions rely on payer’s reasonable expectations and recordkeeping (entity must reasonably expect deductible expenses; accounting entry shown separately) — introduces factual assessment and compliance burden for payers (s6(1)(b)–(c)).","Partial application: normal withholding applies to amounts exceeding specified limits or locum days over the cap, requiring payers to apportion payments and apply standard rates for excess (note to s6; note to s7).","Reporting and documentation exemptions for payments under s8 remove some downstream reporting (payment summaries, STP/notifications) but require clear segregation of affected payments (s9).","Commissioner discretion appears via what the Commissioner “considers reasonable” for travel allowances, introducing administrative judgment (s6(2)(b)–(c)).","Operative repeal of a prior instrument (Schedule 1) means practitioners and payers must map new conditions against the replaced instrument to understand scope changes."],"plain_english_summary":"This instrument sets PAYG withholding to nil for certain payments to religious practitioners: specified travel and car allowances within tax limits (s6), locum services up to two days in a quarter (s7), and certain work or small chaplaincy/counselling payments by non‑religious entities under fixed amounts (s8). Employers and paying entities decide to apply the variation and must keep separate accounting records; payments covered by s8 are exempt from payment summaries and some STP/notification requirements (s9). The change shifts immediate withholding away from payers and places assessment and recordkeeping responsibilities on those payers."}},"importantCases":[],"_links":{"self":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl","history":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl/history","analysis":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl/analysis","conflicts":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl/conflicts","importantCases":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl/important-cases","documents":"/api/acts/taxation-administration-withholding-variation-for-certain-payments-to-religious-practitioners-legisl/documents"}}