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Taxation Administration Act Withholding Schedules 2019
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Turn the raw legal text into a practical explanation grounded in Taxation Administration Act Withholding Schedules 2019.
2 See Terms we use for the definition of average total earnings.
Commissions, bonuses or similar payments
If a commission, bonus or similar payment relates to work your employee performed for more than one pay period (or for an undefined period), you calculate withholding by applying either Method A or Method B(ii).
Do not use this schedule for payments for a single pay period.
If the commission, bonus or similar payment relates to work your employee performed in a single pay period (for example, a week, a fortnight or a month) the amount is added to all their other earnings for the current period. Withholding is then calculated using the standard PAYG withholding tax tables.
HELP, SSL, TSL, SFSS and additional payments
If your employee has advised you they have a Higher Education Loan Program (HELP), Student Start-up Loan (SSL), Trade Support Loan (TSL) or Financial Supplement debt on their Tax file number declaration or Withholding declaration, you must also withhold from the additional payment using the relevant HELP/SSL/TSL or SFSS tax tables.
You calculate the amounts you need to withhold from additional payments for HELP, SSL, TSL and SFSS by using the same method you used to calculate the PAYG withholding amount from the additional payment.
For example, if you calculate the amount to be withheld from the additional payment using Method A, use the same method to calculate the amounts to be withheld for HELP, SSL, TSL and SFSS purposes.
How do you calculate withholding on the additional payment if it is calculated separately to the HELP, SSL, TSL and SFSS components?
If you calculate withholding separately, you need to make sure that the withholding limit in Method A and Method B(ii) applies to the combined total calculated for the additional payment and the HELP, SSL, TSL and SFSS components. For example, at step 9 in Method A you must combine the amounts from the two separate calculations used for step 7 before comparing it to the amount calculated at step 8.
You can use the following schedule that combine PAYG withholding with HELP, SSL, TSL and SFSS instead of repeating the calculation separately for each component:
Statement of formulas for calculating HELP, SSL, TSL and SFSS components
The results obtained when using the coefficients in the above schedule may differ slightly from the sums of the amounts shown in the PAYG tax tables. Either calculation is acceptable.
Copies of all the tax tables are available, refer to Tax tables.
Variations
If your employee has a withholding variation in place for the current financial year, you use one of the following to work out the amount of withholding from additional payments:
■ the varied rate – if the relevant income is specified in the variation notice
■ this tax table – if the relevant income is not specified in the variation notice.
If your employee had a withholding variation in place at the time the additional payment accrued but the withholding variation is no longer in effect when the additional payment is made, it does not apply when working out the amount to withhold.
If you need help to determine whether to use a withholding variation to work out the amount to withhold from an additional payment, phone us on 1300 360 221.
Leave without pay
For the purposes of this table, any periods where your employee has taken leave without pay do not affect the calculations outlined in each of the methods. For example, for Method A and Method B(ii), you are still required at step 3 to apportion all additional payments made by the total number of pay periods in a financial year (that is, 52 weekly pay periods, 26 fortnightly pay periods or 12 monthly pay periods).
Superannuation income streams
To work out the amount you need to withhold from the taxable component of back payments of super income streams (pensions and annuities), including lump sum payments in arrears, use either Method A or B.
You must record back payments on your employee’s payment summary. What payment summary you use depends on whether the back payments relate to a superannuation income stream or previous period of assessable foreign service. Use:
■ PAYG payment summary – individual non-business for all back payments except those for super income streams or if they were related to a previous period of assessable foreign service
■ PAYG payment summary – superannuation income stream for super income stream payments
■ PAYG payment summary – foreign employment for payments related to a previous period of assessable foreign service.
For more information about payment summaries, refer to PAYG payment summaries: forms and guidelines.
Completing the individual non-business payment summary
For payments accrued in the current financial year include the total:
■ gross amount of all payments at ‘Gross payments’
Salary and wage income accrued before the current financial year
For each payment accrued in a prior financial year, but not more than 12 months before the date of payment include the total:
For each payment accrued more than 12 months before the date of payment of less than $1,200, include the total:
For each payment accrued more than 12 months before the date of payment of $1,200 or more, include the total:
Other amounts accrued before the current financial year3
For each payment accrued in a prior financial year of less than $1,200, include the total:
For each payment accrued in a prior financial year of $1,200 or more, include the total:
Employee letter
You must also provide your employee with a letter specifying the financial years over which the amount accrued and the gross amount that accrued each financial year.
Completing the superannuation income stream payment summary
For payments accrued in the current financial year, include:
■ the component amounts at both
– ‘Taxable component’ (both taxed and untaxed elements if applicable)
– ‘Tax-free component’
■ the amount withheld at ‘Total tax withheld’.
For payments accrued prior to the current financial year, include:
■ the component amounts at both
– ‘Lump sum in arrears – taxable component’ (both taxed and untaxed elements if applicable)
– ‘Lump sum in arrears – tax-free component’
■ the amount withheld at ‘Total tax withheld’.
Payee letter
You must also provide your payee with a letter specifying the financial years over which the amount accrued and the gross amount that accrued each financial year.
Completing the foreign employment payment summary
For salary and wage payments accrued in the current financial year, include the total:
■ gross amount of all payments at ‘Gross payments’
For each salary and wage payment accrued in a prior financial year, but not more than 12 months before the date of payment, include the total:
For each salary and wage payment accrued more than 12 months before the date of payment of less than $1,200, include the total:
For each salary and wage payment accrued more than 12 months before the date of payment of $1,200 or more, include the total:
Employee letter
You must also provide your employee with a letter specifying the financial years over which the amount accrued and the gross amount that accrued each financial year.