• Withholding for 27 fortnightly or 53 weekly pays in a year

    In some income years, if you pay your payees:

    • fortnightly – they will have 27 pay days for the year instead of the usual 26
    • weekly – they will have 53 pay days for the year instead of the usual 52.

    The withholding tax tables we publish are based on the normal number of pays in a year. Tax rates increase as taxable incomes increase. Therefore, the additional pay day will mean amounts withheld from salary or wage payments made to many payees will not cover the amount payable when they lodge their tax returns.

    What can be done?

    Additional amounts can be withheld

    Every taxpayer's circumstances are different, but those who normally expect to receive a small tax refund at the end of the year are likely to find they owe tax to us because of the additional pay day. If any of your payees are concerned about the possible shortfall in amounts withheld, they can ask you to withhold additional amounts as shown below:

    Weekly earnings

    Additional withholding per pay

    $725 to $1,524

    $3

    $1,525 to $3,449

    $4

    $3,450 and over

    $10

    Fortnightly earnings

    Additional withholding per pay

    $1,400 to $3,049

    $12

    $3,050 to $6,799

    $17

    $6,800 and over

    $42

    Note: the above amounts are based on tax rates that apply from 1 July 2015.

    A schedule detailing the additional amounts to withhold to cover any shortfall is included in:

    Payee requests

    Your payee's request to have additional amounts withheld in accordance with the tables above should be in writing, but can be in any format that suits your business. For example, email requests could be used or you may design a paper or computer-based form for the purpose.

    If any of your payees want to increase the amounts withheld in addition to those outlined in the tables above, they can request an upward variation.

    What can you do?

    If your payees will receive an additional pay during the year, we encourage you to:

    • inform them about this issue
    • put processes in place so they can request additional amounts to be withheld as shown in the tables above.

    Example: effects of the additional pay day

    Fortnightly pay

    $3,200  

    amounts withheld per pay
    amounts withheld 26 pays
    amounts withheld 27 pays

    $786
    $20,436
    $21,222

    Annual pay (26 pays)

    $83,200  

    tax payable
    less amounts withheld
    refund

    $20,395
    $20,436
    $41

    Annual pay (27 pays)

    $86,400  

    tax payable
    less amounts withheld
    amount to be paid

    $21,643
    $21,222
    $421

    Note: for a normal 26 fortnight year, the payee would receive a refund of $41 on assessment of their tax return. In a 27 fortnight year, they would face a bill for $421, which would be the tax payable on assessment.

    This example uses tax rates that apply from 1 July 2015. It assumes the payee has no other income or deductions and is not entitled to leave loading.

    More information

      Last modified: 07 Jun 2016QC 17568