Commonwealth legislation

Taxation Administration Act Withholding Schedules October 2016

RepealedCTH

This Act has been repealed and is no longer in force. It is retained for historical reference.

Jurisdiction

Commonwealth

Collection

legislative instrument

Plain English Summary

9/10 complexity

This law provides the technical withholding schedules employers and payroll systems use to calculate how much tax to deduct from wages, back pay, bonuses, termination payments, superannuation income streams and annuities. It also governs payroll collection of student‑loan debts and special rules for seniors, pensioners and foreign residents. It matters to employers, payroll developers and anyone receiving taxed employment or retirement-related payments because it dictates exact formulas, thresholds and withholding amounts.

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Current sections

Direct links to the current provisions in Taxation Administration Act Withholding Schedules October 2016.

Refer to [Other payments you should use this tax table for](#otherpayments)

3 Refer to Other payments you should use this tax table for

Examples Examples

Examples

Example 1: Withholding from a bonus paym Example 1: Withholding from a bonus payment using Method A

Example 1: Withholding from a bonus payment using Method A

Mark, who has an accumulated HELP debt, is due to receive an annual bonus of $900. Mark earns $1,500 per week. Using Method A, calculate the withholding amount for the current pay period as follows:

PAYG withholding component

Step	Instruction	Result
1	Work out Mark’s gross earnings for the current pay period.	$1,500
2	Use the relevant tax table to find the amount to be withheld from Mark’s gross earnings in step 1.	$356
3	Divide the additional payment by the number of pay periods in the financial year.= $900 / 52	$17
4	Add the amount at step 3 to the gross earnings at step 1.= $1,500 + $17	$1,517
5	Use the relevant tax table to find the amount to be withheld from the amount at step 4.	$362
6	Subtract the amount at step 2 from the amount at step 5.= $362 − $356	$6
7	Multiply the amount at step 6 by the number of pay periods in the financial year for the withholding on the additional payment.= $6 × 52	$312

As Mark has an accumulated HELP debt, his employer also needs to calculate a withholding amount from the bonus payment for HELP. They use the same method as they used to calculate withholding for the bonus payment in the first part of this example.

HELP component

Step	Instruction	Result
1	Work out Mark’s gross earnings for the current pay period.	$1,500
2	Use the relevant tax table to find the amount to be withheld for HELP from Mark’s gross earnings in step 1.	$90
3	Divide the additional payment by the number of pay periods in the financial year.= $900 / 52	$17
4	Add the amount at step 3 to the gross earnings at step 1.= $1,500 + $17	$1,517
5	Use the relevant tax table to find the amount to be withheld for HELP from the amount at step 4.	$91
6	Subtract the amount at step 2 from the amount at step 5.= $91 − $90	$1
7	Multiply the amount at step 6 by the number of pay periods in the financial year for the HELP withholding on the additional payment.= $1 × 52	$52

Withholding limit (including HELP component)

Step	Instructions	Result
8	Multiply the additional payment being made in the current pay period by 49%.= $900 × 49%	$441
9	Use the lesser amount of step 7 (combined) and step 8 for the withholding on the additional payment. Ignore any cents.Combine two step 7 results $312 + $52= $364. This amount is used as it’s less than step 8.	$364
10	See below

Calculate the total PAYG withholding amount for the current pay period (step 10)

■ PAYG withholding on gross earnings in the current pay period = $356

■ HELP withholding on gross earnings in the current pay period = $90

■ PAYG withholding on additional payment = $312

■ HELP withholding on additional payment = $52

The total PAYG withholding is $810 ($356 + $90 + $312 + $52).

Example 1 uses both:

■ Higher Education Loan Program (HELP)/Trade Support Loan (TSL) weekly tax table (NAT 2173) effective from 1 July 2015

■ Statement of formulas for calculating the amount to be withheld (NAT 1004) effective from 1 July 2015 – the calculations are made using scale 2, with tax-free threshold.

Example 2: Withholding from a missed pay Example 2: Withholding from a missed payment using Method B(i)

Example 2: Withholding from a missed payment using Method B(i)

Robyn, who has an accumulated HELP debt, is due to receive a back payment relating to the current financial year following a pay rise. Since the first pay period of the current financial year and up until period 8, Robyn has earned $1,000 per week. From pay period 9 (her current pay period), Robyn will earn $1,100 per week. Robyn’s back payment which covers the first eight pay periods of the current financial year will be paid to her in pay period 9. Therefore, Robyn will receive a back payment of $800 along with her normal gross earnings of $1,100. Using Method B(i), calculate the withholding amount for the current pay period 9 as follows:

PAYG withholding component

Step	Instruction	Result
1	Work out how much of Robyn’s additional payment applied to each earlier pay period in the current financial year. In this example it is $800 over eight pay periods.= $800 / 8	$100
2	For the first affected pay period, add the additional payment relevant to that period to the normal earnings previously paid to get the total earnings for that period.= $1,000 + $100	$1,100
3	Use the relevant tax table to find the amount to be withheld from Robyn’s total earnings for that period.	$217
4	Subtract the amount previously withheld for the period from the amount at step 3.= $217 – $183	$34
5	Repeat steps 2–4 for each pay period affected. Total the amounts calculated in step 4 for each pay period for the withholding on the additional payment. As it is the same amount for each pay period in this example, it will be 8 × $34.	$272
6	Use the relevant tax table to find the amount to be withheld from Robyn’s gross earnings for the current pay period.	$217
7	Add the withholding on the additional payment (step 5) to the withholding on Robyn’s gross earnings (step 6) to work out the total withholding for the current pay period.= $217 + $272	$489

As Robyn has an accumulated HELP debt, her employer also needs to calculate a withholding amount from the back payment for HELP. They use the same method as they used to calculate withholding for the back payment in the first part of this example.

HELP component

Step	Instruction	Result
1	Work out how much of Robyn’s additional payment applied to each earlier pay period in the current financial year. In this example it is $800 over eight pay periods.= $800 / 8	$100
2	For the first affected pay period, add the additional payment relevant to that period to the normal earnings previously paid to get total normal earnings for that period.= $1,000 + $100	$1,100
3	Use the relevant tax table to find the amount to be withheld for HELP from Robyn’s total normal earnings for that period.	$44
4	Subtract the amount previously withheld for the period from the amount at step 3.= $44 – $0	$44
5	Repeat steps 2–4 for each pay period affected. Total the amounts calculated in step 4 for each pay period for the HELP withholding on the additional payments. As it is the same amount for each pay period in this example, it will be 8 × $44.	$352
6	Use the relevant tax table to find the amount to be withheld for HELP from Robyn’s gross earnings for the current pay period.	$44
7	Add the HELP withholding on the additional payment (step 5) to the withholding on Robyn’s gross earnings (step 6) to work out the withholding for HELP for the current period.= $44 + $352	$396

Calculate the total PAYG withholding amount for the current pay period

■ PAYG withholding on gross earnings in the current pay period = $217

■ HELP withholding on gross earnings in the current pay period = $44

■ PAYG withholding on additional payment = $272

■ HELP withholding on additional payment = $352

The total PAYG withholding is $885 ($217 + $44 + $272 + $352).

Example 2 uses:

■ Higher Education Loan Program (HELP)/Trade Support Loan (TSL) weekly tax table (NAT 2173) effective from 1 July 2015

■ Statement of formulas for calculating the amount to be withheld (NAT 1004) effective from 1 July 2015 – the calculations are made using scale 2, with tax-free threshold.

Example 3: Withholding from a lump sum p Example 3: Withholding from a lump sum payment in arrears using Method B(ii)

Example 3: Withholding from a lump sum payment in arrears using Method B(ii)

Mary is employed by Minercorp Pty Ltd and receives a fortnightly salary of $1,800. She is entitled to an allowance from her employer when working in remote areas. In 2013, Mary worked in a remote area for six months, but she was not paid this allowance. The total allowance that she should have been paid for this period was $2,480. Her employer discovers their oversight and agrees to pay her the $2,480 as a lump sum payment in arrears on 11 November 2015. Her gross earnings for pay period 10 is $1,800.

Mary has received normal earnings (year to date) of $18,000 including the current pay. The amount Mary’s payer must withhold from this payment is calculated using Method B(ii) as follows:

Step	Instruction	Result
1	Calculate Mary’s average total earnings over the current financial year to date (including current pay).= $18,000 / 10	$1,800
2	Use the relevant tax table to find the amount to be withheld from Mary’s average total earnings in step 1.	$296
3	Add all additional payments made to Mary in the current financial year if Method B(ii) was used to calculate the withholding, to the additional payment in the current pay. Mary’s additional payment of $2,480 is then divided by the number of pay periods in the financial year.= $2,480 / 26	$95
4	Add the amount at step 3 to the average total earnings at step 1.= $1,800 + $95	$1,895
5	Use the relevant tax table to find the amount to be withheld from the amount at step 4.	$328
6	Subtract the amount at step 2 from the amount at step 5.= $328 – $296	$32
7	Multiply the amount in step 6 by the number of pay periods used in step 3.= $32 × 26	$832
8	Subtract any amounts previously withheld from additional payments in the current financial year if Method B(ii) was used, from the amount at step 7 for the withholding on the additional payment.= $832 – $0	$832
9	Use the relevant tax table to find the amount to be withheld from the payee’s gross earnings (excluding additional payments) for the current pay period.	$296
10	Work out the total PAYG withholding for this pay period by adding the withholding on the additional payment (step 8) to the withholding on the gross earnings (step 9).= $832 + $296	$1,128

Example 3 uses Statement of formulas for calculating the amount to be withheld (NAT 1004) effective from 1 July 2015. The calculations are made using scale 2, with tax-free threshold.

Example 4: Withholding using Method B(i) Example 4: Withholding using Method B(i) and Method B(ii)

Example 4: Withholding using Method B(i) and Method B(ii)

Pablo, who has an accumulated Financial Supplement debt, is employed by Macropayers Pty Ltd. On 1 September 2015, he received a salary increase of $5 an hour, taking his gross monthly salary from $4,800 to $5,600. His employer agreed that the increase would be backdated to 1 August 2014 and paid at the end of September 2015.

This means that the back payment of salary covers 13 pay periods. The total back payment of salary is $10,400. To work out the total amount to be withheld from the back payment to Pablo, his employer will need to calculate the amount accrued in both:

■ the current financial year (2 pay periods from 1 July to August 2015) = $1,600

■ a prior financial year (11 pay periods from 1 August 2014 to 30 June 2015) = $8,800.

You don’t need to complete some steps if both Methods B(i) and (ii) are used in the calculations.

Method B(i) – PAYG withholding component

Step	Instruction	Result
1	Work out how much of Pablo’s additional payment applied to each earlier pay period in the current financial year. In this example it is $1,600 over two pay periods.= $1,600 / 2	$800
2	For the first affected pay period, add the additional payment relevant to that period to the normal earnings previously paid to get total earnings for that period.= $4,800 + $800	$5,600
3	Use the relevant tax table to find the amount to be withheld from Pablo’s total earnings for that period.	$1,231
4	Subtract the amount previously withheld for the period from the amount at step 3.= $1,231 – $953	$278
5	Repeat steps 2–4 for each pay period affected. Total the amounts calculated in step 4 for each pay period for the withholding on the additional payment. As it is the same amount for each pay period in this example, it will be 2 × $278.	$556
6	This step is not required as withholding is also calculated using Method B(ii).
7	This step is not required as withholding is also calculated using Method B(ii).

As Pablo has an accumulated Financial Supplement debt, his employer will need to calculate a withholding amount from the back payment for SFSS. They use the same method as they used to calculate withholding for the back payment in the first part of this example.

Method B(i) – SFSS component

Step	Instruction	Result
1	Work out how much of Pablo’s additional payment applied to each earlier pay period in the current financial year. In this example it is $1,600 over two pay periods.= $1,600 / 2	$800
2	For the first affected pay period, add the additional payment relevant to that period to the normal earnings previously paid to get total normal earnings for that period.= $4,800 + $800	$5,600
3	Use the relevant tax table to find the amount to be withheld for SFSS from Pablo’s total normal gross earnings for that period.	$169
4	Subtract the amount previously withheld for the period from the amount at step 3.= $169 – $95	$74
5	Repeat steps 2–4 for each pay period affected. Total the amounts calculated in step 4 for each pay period for the SFSS withholding on the additional payment. As it is the same amount for each pay period in this example, it will be 2 × $74.	$148
6	This step is not required as withholding is also calculated using Method B(ii).
7	This step is not required as withholding is also calculated using Method B(ii).

Method B(ii) – PAYG withholding component

Step	Instruction	Result
1	Calculate Pablo’s average total earnings, which in this example is= (salary earnings to date + current financial year additional payments to date) / number of pay periods= [($4,800 + $4,800 + $5,600) + $1,600] / 3= $16,800 / 3	$5,600
2	Use the relevant tax table to find the amount to be withheld from Pablo’s average total earnings in step 1.	$1,231
3	Add all additional payments made to Pablo in current financial year where Method B(ii) was used to calculate the withholding, to the additional payment in current pay. Then divide by the number of pay periods in the financial year.= $8,800 / 12	$733
4	Add the amount at step 3 to the average total earnings at step 1.= $5,600 + $733	$6,333
5	Use the relevant tax table to find the amount to be withheld from the amount at step 4.	$1,482
6	Subtract the amount at step 2 from the amount at step 5.= $1,482 – $1,231	$251
7	Multiply the amount in step 6 by the number of pay periods used in step 3.= $251 × 12	$3,012
8	Subtract any amounts previously withheld from additional payments in the current financial year if Method B(ii) was used, from the amount at step 7 for the withholding on the additional payment.= $3,012 – $0	$3,012
9	This step is not required as final calculations for withholding limit and total withholding will be made after SFSS component is calculated.
10	This step is not required as final calculations for withholding limit and total withholding will be made after SFSS component is calculated.
11	This step is not required as final calculations for withholding limit and total withholding will be made after SFSS component is calculated.
12	This step is not required as final calculations for withholding limit and total withholding will be made after SFSS component is calculated.

As Pablo has an accumulated Financial Supplement debt his employer will need to calculate the withholding amount from the back payment for SFSS. They use the same method as they used to calculate withholding for the back payment in the first part of this example.

Method B(ii) – SFSS component

Step	Instruction	Result
1	Calculate Pablo’s average total earnings, which in this example is:= (salary earnings to date + current financial year additional payments to date) / number of pay periods= [($4,800 + $4,800 + $5,600) + $1,600] / 3= $16,800 / 3	$5,600
2	Use the relevant tax table to find the amount to be withheld for SFSS on Pablo’s average total earnings in step 1.	$169
3	Add all additional payments made to Pablo in current financial year where Method B(ii) was used to calculate the withholding, to the additional payment in current pay. Then divide by the number of pay periods in the financial year.= $8,800 / 12	$733
4	Add the amount at step 3 to the average total earnings at step 1.= $5,600 + $733	$6,333
5	Use the relevant tax table to find the amount to be withheld for SFSS from the amount at step 4.	$191
6	Subtract the amount at step 2 from the amount at step 5.= $191 – $169	$22
7	Multiply the amount in step 6 by the number of pay periods used in step 3.= $22 × 12	$264
8	Subtract any amounts previously withheld from additional payments in the current financial year if Method B(ii) was used, from the amount at step 7 for the withholding for SFSS on the additional payment.= $264 – $0	$264

Withholding limit (including SFSS component)

Step	Instruction	Result
9	Multiply the additional payment being made using Method B(ii) in the current pay period by 49%.= $8,800 × 49%	$4,312
10	Use the lesser amount of step 8 (combined) and step 9 for the withholding on the additional payment. Ignore any cents.Combine the two step 8 results.= $3,012 + $264 = $3,276This amount is used as it’s less than step 9.	$3,276
11	This step is not applicable as total withholding for the current pay period will need to include amounts calculated in Method B(i).
12	This step is not applicable as total withholding for the current pay period will need to include amounts calculated in Method B(i).

Calculate the total PAYG withholding amount for the current pay period

Withholding on gross earnings current pay period

■ PAYG withholding on gross earnings in the current pay period = $1,231

■ SFSS withholding on gross earnings in the current pay period = $169

Method B(i) withholding

■ PAYG withholding on additional payment for current financial year = $556

■ SFSS withholding on additional payment for current financial year = $148

Method B(ii) withholding

■ PAYG withholding on additional payment for prior financial year = $3,012

■ SFSS withholding on additional payment for prior financial year = $264

Total PAYG withholding is $5,380
($1,231 + $169 + $556 + $148 + $3,012 + $264).

Example 4 uses both:

■ Student Financial Supplement Scheme (SFSS) monthly tax table (NAT 3308) effective from 1 July 2015

■ Statement of formulas for calculating the amount to be withheld (NAT 1004) effective from 1 July 2015 – the calculations are made using scale 2, with tax-free threshold.

Sch 6

– Tax table for annuities

Schedule 6 – Tax table for annuities

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 paragraph 12-80(b) of Schedule 1 to the TAA.

You should use this table if you pay an annuity that was purchased with non-superannuation money, for example, an initial capital investment of personal cash.

For annuities purchased using money rolled over from a super fund or super income stream payments, refer to Tax table for superannuation income streams.

To work out the withholding amount for an annuity payment purchased with non-superannuation money, you must:

Work out the amount of income to withhold from using the following formula:

Annuity payment - [Deductible 27H amount / Number of instalments]

In this formula:

■ deductible amount represents the amount of the annuity payment that is exempt from tax. This amount is calculated using the formula found in section 27H of the Income Tax Assessment Act 1936.

– Where the annuity is held in only one person's name, the following formula is used:

(Undeducted purchase price of the annuity - Residual capital value) / Term of annuity or life expectation factor
The undeducted purchase price is generally the amount of the initial capital investment.

– Where the annuity is held or payable to 2 or more people, the deductible amount is apportioned depending on the amount each person received.

■ number of instalments is the number of instalments of the annuity payable in the income year.

The recipient of the annuity may request the ATO to calculate the deductible amount of their annuity using Request for determination of the deductible amount of UPP of an Australian pension or annuity.

Use the corresponding PAYG withholding tax table to find the withholding amount. The tax table you use depends on the period which the annuity is paid – for example, weekly or fortnightly.

Some payees may be eligible to claim the seniors and pensioners tax offset (SAPTO). If your payee gives you a Withholding declaration indicating that they want to claim a SAPTO entitlement through PAYG withholding, use the Tax table for seniors and pensioners to work out the amount to withhold from the income amount calculated in step 1.

These examples use the PAYG withholding tax tables that apply from 1 October 2016.

Example 1

Barbara has an annuity she purchased following the sale of a property. She receives annuity payments of $1,000 a week. The deductible amount for the 2016–17 income year is $5,200.

The amount income to withhold from:
Annuity payment - [Deductible amount / Number of instalments]
= $1,000 - [$5,200 / 52]
= $1,000 - $100
= $900
Barbara is not eligible for SAPTO so the payer will use the Weekly tax table (NAT 1005) to work out how much to withhold from $900. Assuming Barbara is claiming the tax-free threshold, the amount to be withheld is $148.

Example 2

Kenneth will receive fortnightly annuity payments on the 7th and 21st day of the month from 7 February 2017. For the remainder of the income year, the annuity will be $850 per fortnight. The annuity is indexed annually and the higher indexed amount is paid from 7 July 2017.

Kenneth's deductible amount for a whole income year is $2,400 and for the part of the current income year that he is to receive an annuity; his deductible amount is $1,000.

For the current income year, Kenneth will receive ten annuity instalments.

The amount of income to withhold from:
Annuity payment - [Deductible amount / Number of instalments]

= $850 - [$1,000 / 10]
= $850 - $100
= $750

Kenneth is not eligible for SAPTO so the payer will then use the Fortnightly tax table (NAT 1006) to work out how much to withhold from $750. Assuming Kenneth is claiming the tax-free threshold, the amount to be withheld is $8.

Withholding amounts calculated using the above formulas should be rounded to the nearest dollar. Results ending in 50 cents are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Payment summaries

You must issue a PAYG payment summary – individual non-business to the payee by 14 July following the end of the financial year in which you made payments to them. However, if your payee requests a payment summary from you during the financial year, you must provide it within 14 days of receiving their request.

The answers your payees 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 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 49% from any payment you make to a resident payee and 47% from any payment you make to a foreign resident payee (ignoring any cents), if it is an annuity payment that is not a superannuation income stream and 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 (NAT 1432) 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 49% for any annuity payment you make to a resident payee and 47% for any annuity payment you make to a foreign resident payee (ignoring any cents) unless we tell you not to.

When a TFN has not been provided do not allow for tax offsets or Medicare levy adjustments. Do not withhold any amount for:

Sch 7

– Tax table for unused leave payments on termination of employment

Schedule 7 – Tax table for unused leave payments on termination of employment

You should use this table if you pay an amount to an employee for unused leave on the termination of their employment or office.

Unused leave payments on termination of employment or office include:

■ annual leave

■ holiday pay

■ leave loading

■ leave bonuses

■ long service leave.

Before calculating the amount to be withheld, you must work out if the payments are being made as a result of a genuine redundancy, invalidity or an early retirement scheme.

For more information, refer to Withholding from unused leave payments on termination of employment.

When a TFN is provided

The amount to withhold is calculated using the table below.

If the post-17 August 1993 lump sum payment from normal termination is less than $300, you must withhold the lesser of the following:

■ the amount worked out using the table below

■ 32% of the payment.

<table cellspacing="0" cellpadding="0" style="border:0.75pt solid #000000; border-collapse:collapse"><tbody><tr><td style="width:72.6pt; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Payment type</td><td style="width:109.65pt; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Reason</td><td style="width:95.55pt; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Accrual dates</td><td style="width:63.55pt; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Withholding rates</td><td style="width:64.2pt; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Payment summary label</td></tr><tr><td rowspan="6" style="width:72.6pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Long service leave</td><td rowspan="3" style="width:109.65pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Normal termination (eg voluntary resignation, employment terminated due to inefficiency, retirement)</td><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Pre-16 August 1978</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">5% of total at marginal rates</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">B</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">16 August 1978 to 17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Post-17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Marginal rates</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Include in salary/wages</td></tr><tr><td rowspan="3" style="width:109.65pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Termination because of genuine redundancy, invalidity or early retirement scheme</td><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Pre-16 August 1978</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">5% of total at marginal rates</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">B</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">16 August 1978 to 17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Post-17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td rowspan="3" style="width:72.6pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Annual leave</td><td rowspan="2" style="width:109.65pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Normal termination (eg voluntary resignation, employment terminated due to inefficiency, retirement)</td><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Pre-18 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Post-17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Marginal rates</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Include in salary/wages</td></tr><tr><td style="width:109.65pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Termination because of genuine redundancy, invalidity or early retirement scheme</td><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"></td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td rowspan="3" style="width:72.6pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Annual leave loading</td><td rowspan="2" style="width:109.65pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Normal termination (eg voluntary resignation, employment terminated due to inefficiency, retirement)</td><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Pre-18 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr><tr><td style="width:95.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Post-17 August 1993</td><td style="width:63.55pt; border:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Marginal rates</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; border-bottom:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Include in salary/wages</td></tr><tr><td style="width:109.65pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">Termination because of genuine redundancy, invalidity or early retirement scheme</td><td style="width:95.55pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top"></td><td style="width:63.55pt; border-top:0.75pt solid #000000; border-right:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">32%</td><td style="width:64.2pt; border-top:0.75pt solid #000000; border-left:0.75pt solid #000000; padding-right:5.03pt; padding-left:5.03pt; vertical-align:top">A</td></tr></tbody></table> ```

Withholding amounts calculated by applying this table are rounded to the nearest dollar. Results ending in 50 cents or higher are rounded upwards. If a TFN is not provided, ignore cents when calculating withholding amounts.

Marginal rate calculation

To work out the marginal rate, you must:

Using the relevant PAYG withholding tax table, work out the amount to withhold from your employee’s normal gross earnings for a regular pay period.
Divide the amount of the payment by the number of normal pay periods in 12 months (12 monthly payments, 26 fortnightly payments or 52 weekly payments).
Ignore any cents.
Add the amount at step 3 to the normal gross earnings for a single pay period.
Use the same PAYG withholding tax tables used at step 1 to work out the amount to withhold for the amount at step 4.
Subtract the amount at step 1 from the amount at step 5.
Multiply the amount obtained at step 6 by the number of normal pay periods in 12 months (12 monthly payments, 26 fortnightly payments or 52 weekly payments).

Do not withhold any amount for:

Normal gross earnings

Normal gross earnings are all payments, except those relating to termination payments, received in the last full pay period of employment. This includes taxable allowances, overtime and bonuses. Therefore, your employee’s normal gross earnings should be taken to be the earnings relating to the last full pay period worked.

Where your employee’s pay fluctuates significantly over a number of pay periods, we will accept an average of gross taxable earnings for the financial year to date over the number of pays received.

The following example uses the Weekly tax table (NAT 1005) effective from 1 October 2016.

Beth retires on 31 December 2016. She qualified for long service leave after 10 years of service, with further leave accruing on each completed year of service.

She is not leaving because of genuine redundancy, invalidity or under an early retirement scheme.

This week Beth also receives her normal weekly earnings of $800. She has quoted her TFN and has claimed the tax-free threshold. Therefore, the amount withheld is calculated using column 2 of the Weekly tax table.

Details of payment for long service leave

Pre-16 August 1978 component = $3,690.00

August 1978 to 17 August 1993 component = $7,700.00

16 August 1978 to 17 August 1993 component = $7,700.00

Post-17 August 1993 component = $10,890.00

Pre–16 August 1978 component subject to withholding

= $3,690.00 × 5% = $184.50

The marginal rate calculation is used to work out the amount to be withheld from the pre-16 August 1978 component.

16 August 1978 to 17 August 1993 component

= $7,700.00 × 32% = $2,464.00

The post-17 August 1993 component of $10,890.00 is also to be withheld at the marginal rate. To simplify the marginal rate calculation for this employee, the pre-16 August 1978 component and the post-17 August 1993 component are added together first: $184.50 + $10,890.00 = $11,074.50

Now apply the marginal rate calculation to the sum of the two components.

Step	Instruction	Result
1	Amounts to be withheld from normal gross earnings ($800)	$113
2	Divide the amount of the payment by the number of normal pay periods in 12 months ($11,074.50/52)	$212.97
3	Disregard any cents	$212
4	Add the amount at step 3 to normal gross earnings for a single pay period ($800 + $212)	$1,012
5	Work out the amount to be withheld from the amount at step 4 ($1,012)	$187
6	Subtract the amount at step 1 from the amount at step 5 ($187 – $113)	$74
7	Multiply the amount at step 6 by the number of normal pay periods in 12 months ($74 x 52)	$3,848

The amount to be withheld from the three components of Beth’s unused long service leave payments is $6,312 ($2,464 + $3,848). See Rounding of withholding amounts.

The total amount to be withheld is then $6,425 ($113 withholding from normal earnings plus $6,312 withholding from long service leave).

If your employee who is receiving the unused leave payments has not provided you with their TFN before the payment is made, you must withhold 49% from the payment.

If your employee is a foreign resident who has not provided you with their TFN, you must withhold 47% from the payment.

If your employee believes that for their circumstances the amount you withhold will be too much, they may apply for a variation to reduce the amount of withholding.

For more information refer to PAYG withholding – varying your PAYG withholding

Tax file number declaration

Any Tax file number declaration (NAT 3092) your employee provides while they were working for you will only be effective:

■ for the period that they were working for you

■ 12 months after you make the last payment.

More sections below

Source text: opening excerpt

Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.

HELP, TSL, SFSS and additional payments HELP, TSL, SFSS and additional payments

HELP, TSL, SFSS and additional payments

If your employee has advised you they have a Higher Education Loan Program (HELP), Trade Support Loan (TSL) or Financial Supplement debt on their Tax file number declaration (NAT 3092) or Withholding declaration (NAT 3093), you must also withhold from the additional payment using the relevant HELP/TSL or SFSS tax tables.

You calculate the amounts you need to withhold from additional payments for HELP, 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, TSL and SFSS purposes.

How do you calculate withholding on the additional payment if it is calculated separately to the HELP, 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, 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.

Get it done

You can use the following schedule that combine PAYG withholding with HELP, TSL and SFSS instead of repeating the calculation separately for each component:

■ Schedule 8 - Statement of formulas for calculating Higher Education Loan Program (HELP), Trade Support Loan (TSL) and Student Financial Supplement Scheme (SFSS) components (NAT 3539).

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 on our website, refer to Tax tables.

Variations Variations

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

Taxation Administration Act Withholding Schedules October 2016

Plain English Summary

Deep dive

Current sections

Refer to [Other payments you should use this tax table for](#otherpayments)

Examples Examples

Examples

Example 1: Withholding from a bonus paym Example 1: Withholding from a bonus payment using Method A

Example 1: Withholding from a bonus payment using Method A

Example 2: Withholding from a missed pay Example 2: Withholding from a missed payment using Method B(i)

Example 2: Withholding from a missed payment using Method B(i)

Example 3: Withholding from a lump sum p Example 3: Withholding from a lump sum payment in arrears using Method B(ii)

Example 3: Withholding from a lump sum payment in arrears using Method B(ii)

Example 4: Withholding using Method B(i) Example 4: Withholding using Method B(i) and Method B(ii)

Example 4: Withholding using Method B(i) and Method B(ii)

– Tax table for annuities

– Tax table for unused leave payments on termination of employment

August 1978 to 17 August 1993 component = $7,700.00

Source text: opening excerpt

HELP, TSL, SFSS and additional payments HELP, TSL, SFSS and additional payments

HELP, TSL, SFSS and additional payments

Variations Variations

Leave without pay Leave without pay

Leave without pay

Superannuation income streams Superannuation income streams

Superannuation income streams

Payment summaries Payment summaries

Payment summaries

Examples Examples

Examples

Example 1: Withholding from a bonus paym Example 1: Withholding from a bonus payment using Method A

Example 1: Withholding from a bonus payment using Method A

Example 2: Withholding from a missed pay Example 2: Withholding from a missed payment using Method B(i)

Example 2: Withholding from a missed payment using Method B(i)