Taxation Administration Act 1953 - Pay as you go withholding - Taxation Administration Act Withholding Schedules 2015
Sch 9– Tax table for seniors and pensioners
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Use for payments to low income aged persons and pensioners
This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by Subdivisions 12-B (except sections 12-50 and 12-55), and 12-D of Schedule 1 to the TAA.
You should use this table if you make payments to:
■ seniors and pensioners who, at the end of the relevant financial year, are 65 years of age or older (for example, to be eligible for the year ending 30 June 2016, an employee must be born on or before 30 June 1951).
■ veterans receiving a service pension and/or war widows/widowers receiving an income support supplement from the Department of Veterans’ Affairs who are at least 60 years of age.
This table applies to weekly payments including:
■ salary, wages, allowances and leave loading paid to employees
■ director’s fees
■ payments to labour hire workers
■ compensation, sickness or accident payments that are calculated at a periodical rate and made because a person is unable to work (unless the payment is made under an insurance policy to the policy owner)
■ a non-super income stream
■ a super income stream.
This tax table can only apply if the employee has provided you with either:
Calculate your employee's total weekly earnings, add any allowances and irregular payments that will be included in this week’s pay to the normal weekly earnings, ignoring any cents.
Input the amount from step 1 into the Withholding look-up tool, as per instructions in the tool.
Use the appropriate column to find the correct amount to withhold. If your employee is:
single, use column 2
a member of an illness-separated couple, use column 3
a member of a couple, use column 4.
If your employee is entitled to a tax offset or a Medicare levy adjustment, subtract its weekly value from the withholding amount found in step 3.
An employee has weekly earnings of $619.75. To work out the correct amount to withhold, ignore cents and input $619 into the Withholding look-up tool.
If the employee is:
■ single, use column 2 to find the correct amount to withhold ($7.00)
■ a member of an illness-separated couple, use column 3 to find the correct amount to withhold ($13.00)
■ a member of a couple, use column 4 to find the correct amount to withhold ($27.00).
Calculating fortnightly or monthly withholding amounts
First calculate the weekly equivalent of fortnightly or monthly earnings. If you pay:
■ fortnightly – divide the sum of the fortnightly earnings and the amount of any allowances subject to withholding by two. Ignore any cents in the result and then add 99 cents.
■ monthly – obtain the sum of the monthly earnings and the amount of any allowances subject to withholding (if the result is an amount ending in 33 cents, add one cent). Multiply this amount by three and then divide by 13. Ignore any cents in the result and then add 99 cents.
Then calculate fortnightly or monthly withholding amounts as follows:
■ fortnightly – work out the rounded weekly withholding amount applicable to the weekly equivalent of earnings, before any adjustment for tax offsets. Multiply this amount by two.
■ monthly – work out the rounded weekly withholding amount applicable to the weekly equivalent of earnings, before any adjustment for tax offsets. Multiply this amount by 13, divide the product by three and round the result to the nearest dollar.
The withholding amounts shown in this table can be expressed in a mathematical form.
Withholding amounts calculated as a result of applying the formulas are rounded to the nearest dollar. Results ending in 50 cents are rounded to the next higher dollar.
If no TFN is provided, ignore cents when you calculate withholding amounts.
Accounting software
Software written in accordance with the formulas should be tested for accuracy against the withholding amounts obtained using the Withholding look-up tool. You should only use such software if it produces the exact amounts.
Values of the coefficients a and b for each set of formulas
The answers your employees provide on their Tax file number declaration (NAT 3092) determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from an employee, it will override the previous one.
If an employee does not give you a valid Tax file number declaration within 14 days of starting an employer/employee relationship, you must complete a Tax file number declaration with all available details of the employee and send it to us.
You must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents), if all of the following apply:
If the employee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident employee and 47% from a foreign resident employee (ignoring any cents) unless we tell you not to.
Do not allow for any tax offsets or Medicare levy adjustment. Do not withhold any amount for:
When your employee has a HELP, TSL or Financial Supplement debt
If your employee has a HELP, TSL or Financial Supplement debt, you may need to withhold additional amounts from their payments. Your employee will need to notify you of this on their Tax file number declaration or Withholding declaration.
If you pay leave loading on a pro-rata basis, add the leave loading payment to the earnings for that period to calculate withholding.
Claiming tax offsets
If your employee chooses to claim their entitlement to a tax offset through reduced withholding, they must give you a Withholding declaration.
To work out your employee's annual tax offset entitlement into a weekly value, use the Ready reckoner for tax offsets. Deduct this amount from the amount shown in column 2, 3 or 4 of the Withholding look-up tool.
Ready reckoner for tax offsets
Amount Claimed$
Weekly value$
1
-
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
20
-
30
1.00
40
1.00
50
1.00
57
1.00
60
1.00
70
1.00
80
2.00
90
2.00
100
2.00
200
4.00
300
6.00
338
6.00
400
8.00
500
10.00
600
11.00
700
13.00
800
15.00
850
16.00
900
17.00
1000
19.00
1100
21.00
1173
22.00
1200
23.00
1300
25.00
1400
27.00
1500
29.00
1600
30.00
1700
32.00
1750
33.00
1800
34.00
1900
36.00
2000
38.00
2500
48.00
2535
48.00
3000
57.00
If the exact tax offset amount claimed is not shown in the ready reckoner, you add the values for an appropriate combination.
Tax offsets of $422 claimed. Add values of $400, $20 and $2
= $8 + $0 + $0
= $8.
Therefore, reduce the amount to be withheld by $8.
Withholding declarations
An employee can use the Withholding declaration (NAT 3093) to advise you of a tax offset they choose to claim through reduced withholding. For more information on tax offsets, refer to Claiming tax offsets.
Employees can also use a Withholding declaration to advise you of changes to their situation that may vary the amount you need to withhold.
Changes that may affect the amount you need to withhold include:
■ becoming or ceasing to be an Australian resident for tax purposes
■ claiming or discontinuing a claim for the tax-free threshold
■ advising of a HELP, TSL or Financial Supplement debt (or changes to them)
■ entitlement to a seniors and pensioners tax offset.
When your employee provides you with a Withholding declaration it will take effect from the next payment you make. If you receive an updated declaration from an employee, it will replace the previous one.
An employee must have provided you with a valid Tax file number declaration before they can provide you with a Withholding declaration.
Medicare levy adjustments
To claim the Medicare levy adjustment (available to some low income earners with dependants), an employee must lodge a Medicare levy variation declaration (NAT 0929) with their Tax file number declaration.