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.
■ Use the Withholding look-up tool to quickly work out the amount to withhold (XLSX, 58KB).
You should use this schedule if you make payments to:
■ seniors and pensioners who, at the end of the relevant financial year, are 66 years of age or older (for example, to be eligible for the year ending 30 June 2021, an employee must be born on or before 30 June 1955).
■ 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 schedule 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 schedule can only apply if the payee has provided you with either:
■ a Withholding declaration answering yes to questions 4, 5 and 8
■ a Withholding declaration – short version for seniors and pensioners answering yes to questions 4, 5 and 6.
■ You can download a printable version of Tax table for seniors and pensioners (PDF, 723KB) (NAT 4466) in Portable Document Format (PDF).
■ For super income stream payments, you must also use Tax table for superannuation income streams to calculate withholding.
To work out the withholding amount:
Calculate your payee'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 (XLSX, 58KB), as per instructions in the tool.
Use the appropriate column to find the correct amount to withhold. If your payee 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 payee is entitled to a tax offset or a Medicare levy adjustment, subtract its weekly value from the withholding amount found in step 3.
ExampleA payee has weekly earnings of $619.75. To work out the correct amount to withhold, ignore cents and input $619 into the Withholding lookup tool (XLSX 58KB).If the payee 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 ($10.00)■ a member of a couple, use column 4 to find the correct amount to withhold ($23.00).
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 schedule can be expressed in a mathematical form.
You should read this section with Statement of formulas for calculating amounts to be withheld.
If you have developed your own payroll software package, you can use the following formulas and the coefficients outlined below.
■ y is the withholding amount expressed in dollars
■ x is the weekly earnings rounded down to whole dollars plus 99 cents
■ a and b are the values of the coefficients for the formulas shown in the relevant Values of the coefficients a and b for each set of formulas tables.
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.
Software written in accordance with the formulas in this schedule should be tested for accuracy against the withholding amounts obtained using the Withholding look-up tool (XLSX, 56KB). 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 payees provide on their Tax file number declaration 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 a payee, it will override the previous one.
If a payee does not give you a valid Tax file number declaration within 14 days of starting a payer-payee relationship, you must complete a Tax file number declaration with all available details of the payee and send it to us.
You must withhold 47% from any payment you make to a resident payee and 45% from a foreign resident payee (ignoring any cents), if all of the following apply:
If a payee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals with us, they have 28 days to provide you with their TFN.
If the payee has not given you their TFN within 28 days, you must withhold 47% from any payment you make to a resident payee and 45% from a foreign resident payee (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 study and training support loans.
When your payee has a study and training support loan debt
If your payee has a HELP, VSL, FS, SSL or TSL debt, you may need to withhold additional amounts from their payments. Your payee will need to notify you of this on their Tax file number declaration or Withholding declaration.
Work it out
To calculate additional withholding amounts for:
■ HELP, VSL, FS, SSL or TSL debts – refer to Study and training support loans weekly tax table.
Allowances
Generally, allowances are added to normal earnings and the amount to withhold is calculated on the total amount of earnings and allowances.
For more information on when to withhold and report on allowances, refer to Withholding for allowances.
If you pay leave loading as a lump sum, you need to use Tax table for back payments, commissions, bonuses and similar payments to calculate withholding.
If you pay leave loading on a pro-rata basis, add the leave loading payment to the earnings for that period to calculate withholding.
The seniors and pensioners tax offset (SAPTO) is incorporated into this schedule. If your payee chooses to claim their entitlement to other tax offsets through reduced withholding, they must give you a Withholding declaration.
To work out your payee’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 (XLSX, 58KB).
Ready reckoner for tax offsets
Tax offset entitlement – weekly value
Amount claimed$
Weekly value$
1
–
2
–
3
–
4
–
5
–
6
–
7
–
8
–
9
–
10
–
20
–
30
1
40
1
50
1
57
1
60
1
70
1
80
2
90
2
100
2
200
4
300
6
338
6
400
8
500
10
600
11
700
13
800
15
850
16
900
17
1,000
19
1,100
21
1,173
22
1,200
23
1,300
25
1,400
27
1,500
29
1,600
30
1,700
32
1,750
33
1,800
34
1,900
36
2,000
38
2,500
48
2,535
48
3,000
57
If the exact tax offset amount claimed is not shown in the ready reckoner, you add the values for an appropriate combination.
ExampleTax offsets of $422 claimed. Add values of $400, $20 and $2= $8 + $0 + $0= $8.Therefore, reduce the amount to be withheld by $8.
A payee can use the Withholding declaration 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.
payees can also use a Withholding declaration to advise you of changes to their situation that may vary the amount you need to withhold.
■ advising of a HELP, VSL, FS, SSL or TSL debt (or changes to them)
■ entitlement to a seniors and pensioners tax offset.
When your payee provides you with a Withholding declaration it will take effect from the next payment you make. If you receive an updated declaration from a payee, it will replace the previous one.
A payee 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), a payee must lodge a Medicare levy variation declaration with their Tax file number declaration.
For instructions on how to work out the Medicare levy adjustment, refer to Medicare levy adjustment weekly tax table.