PAYG withholding calculation sheet - payments upon death of a worker

PAYG withholding calculation sheet - payments upon death of a worker

Introduction

This calculation sheet provides information to payers on payments for work or services made after a worker's death, where the payment is of a type covered by Subdivision 12-B of Schedule 1 to the Taxation Administration Act 1953 (TAA).

Withholding from payments for work and services after death

A payer is not required to withhold amounts from these payments for work or services made after the death of the worker. This includes income that was earned prior to death, but paid after the death of the worker. Similarly, a payer is not required to withhold an amount from payments for unused annual leave or unused long service leave paid after the death of the worker.

Attention icon

This calculation sheet does NOT apply to death benefit employment termination payments. A death benefit employment termination payment is any payment that would have been an employment termination payment had the worker been alive at the time of payment, for example payment for unused sick leave or a 'golden handshake'.

For information on death benefit employment termination payments, refer to the website or phone the Superannuation Help Line on 13 10 20.

Payment summary

A payer must prepare a payment summary showing all amounts paid to the worker until their death and the amounts withheld from those payments. The appropriate payment summary depends on the type of payment. Refer to the table below for more information.

Withholding payment

Relevant payment summary and guidelines

Payment to employee

PAYG payment summary - individual non-business (Nat 0046)

How to complete the PAYG payment summary - individual non-business (Nat 3388)

Payment to company director

PAYG payment summary - individual non-business (Nat 0046)

How to complete the PAYG payment summary - individual non-business (Nat 3388)

Payment to office holder

PAYG payment summary - individual non- business (Nat 0046)

(this payment summary is also relevant for payments to employees of labour hire firms)

How to complete the PAYG payment summary - individual non-business (Nat 3388)

Return to work payment

PAYG payment summary - individual non- business (Nat 0046)

How to complete the PAYG payment summary - individual non-business (Nat 3388)

Voluntary agreement to withhold

PAYG payment summary - business and personal services income (Nat 72545)

How to complete the PAYG payment summary - business and personal services income (Nat 72769)

Payment under labour hire arrangement or other specified payment

PAYG payment summary - business and personal services income (Nat 72545)

How to complete the PAYG payment summary - business and personal services income (Nat 72769)

Direction icon

For more information and for sample copies of these forms and guidelines refer to Payment summaries and guidelines

To order printed copies:

Payments for work or services made after the death of the worker are made to either the estate of the deceased person or the person who under the relevant law, industrial award or agreement, is entitled to the money. These amounts should not be shown on the deceased worker's payment summary. However, the payer may wish to provide the deceased estate, trustee or executor of the deceased estate with a statement about these payments to assist in completion of the income tax return for the deceased estate.

Payer guide

The following table provides a step by step guide for payments made to a deceased worker.

Step

Action

1

Prepare a payment summary for payments for work or services made to the worker in the current financial year, showing gross payments and amounts withheld before the date of death of the worker.

2

Prepare the worker's entitlement including:

  • payments for work or services (including retrospective pay and bonus or commission payments) accrued before the death of the worker, but which have not been paid prior to the date of death
  • payments for unused annual and long service leave.

DO NOT:

  • withhold an amount from the payment
  • include details of payments of this nature in the payment summary mentioned above.

3

You may wish to prepare a letter or statement for the estate, trustee or executor of the deceased worker explaining the details of the payment made.

4

You may wish to seek professional advice about the person to whom payments made after the death of the worker must be made. There may be legislation or award conditions that apply.

Direction icon

For more information about payments upon the death of a worker:

Last Modified: Friday, 16 November 2012

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