Taxation Administration Act 1953 - Withholding Schedules 2005 (2004 Budget Changes)
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General example
Payee’s fortnightly earnings are $1,602.78. The payee has provided a Tax file number declaration claiming the tax-free threshold and total dependant tax offsets of $1,227 at the family tax benefit and tax offsets questions on a Withholding declaration. The payee has lodged a Medicare levy variation declaration with 5 children shown at question 12. Scale 12 is applied.
Equivalent weekly earnings = $1602.78 ÷ 2
= $801 (ignore cents)
x = 801.99
Weekly withholding amount (y)
= (a × x) – b
= (0.3075 × 801.99) – 73.0413
= $173.5706 or $174.00 (rounded to nearest dollar)
Fortnightly withholding amount
$174.00 x 2 = $348.00
Tax offsets claimed at the family tax benefit and tax offsets questions on the Withholding declaration
= 3.8% of $1227
= 46.626 or $47.00 (rounded to nearest dollar)
Levy adjustment: Weekly earnings are greater than WFT ($752.96) and less than the SOP ($814) appropriate to payee with 5 children. Formula 3 applies.
= (752.96 × 0.0075) – ((801.99 – 752.96) × 0.0925)
= 5.6472 – 4.5353
= 1.112 or $1.00 (rounded to the nearest dollar)
The fortnightly levy adjustment is therefore $2.00 ($1 × 2) Therefore, net fortnightly withholding amount
$348.00 – $47.00 – $2.00 = $299.00