How do I calculate the varied withholding rate?

If you are applying for a variation because of tax deductible expenses, and your estimated Australian taxable income is more than zero, you need to calculate the required rate of withholding.

To calculate the varied withholding rate, follow the three steps below.

Step 1

Calculate your expected Australian taxable income for the income year:


Work out the total of all Australian payments you will receive in the income year


Work out the amounts of these payments that are non-taxable or exempt


Subtract (b) from (a) - this is the amount of taxable Australian payments


Work out the amount of any allowable deductions


Subtract (d) from the answer to step (c).

Step 2

Calculate the tax payable on your Australian taxable income. Multiply the Australian taxable income by 30% (Australian company tax rate).

Step 3

Calculate the varied withholding rate. Divide the tax payable (from step 2) into the total Australian payments (from step 1(a)) and multiply this by 100.


The examples below show how to use the steps shown above. In both examples, it is assumed that foreign resident withholding payments will be the only type of payments the payees will receive for the income year.

    Last modified: 30 Jan 2013QC 18617