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Medicare levy adjustment monthly tax table

This tax table is for payments made from 13 October 2020 to 30 June 2024.

Last updated 12 October 2020

Using this tax table

This tax table is for payments made from 13 October 2020.

You should use this tax table if you make payments to your employee on a monthly basis and they are entitled to a Medicare levy adjustment.

This tax table should be used with the Monthly tax table and the Medicare levy variation declaration.

You can also:

When your employee is entitled to a Medicare levy adjustment

Your employee is entitled to an adjustment if they meet all of the following requirements:

  • they have provided you with a Medicare levy variation declaration in which they    
    • claimed dependants
    • answered yes to question 10 in the declaration ‘Is the combined weekly income of you and your spouse, or your income as a sole parent, less than the relevant amount in table A on page 2?'.
  • they have monthly earnings of $1,898 or more, but less than the corresponding amount in column A of table 1 – for example, an employee who claims two dependent children must have monthly earnings of less than $4,743 to be entitled to a Medicare levy adjustment.

No Medicare levy is payable on monthly earnings of less than $1,898.

If your employee claims more than 10 children, the column A amount is $7,687, plus $368 for each child claimed in excess of 10.

Column B shows the values used in calculating adjustments for employees with more than five dependent children. If your employee claims more than 10 dependent children, the column B amount is $6,150.33 plus $294.41 for each child in excess of 10.

For information about how to use Table 1, see Working out the Medicare levy adjustment below.

Table 1: Medicare levy adjustments

Table 1 Medicare levy adjustment monthly earnings limits

Dependants

Column A

Column B

Spouse only

$4,007

$0

1 child

$4,375

$0

2 children

$4,743

$0

3 children

$5,111

$0

4 children

$5,479

$0

5 children

$5,847

$0

6 children

$6,215

$4,972.67

7 children

$6,583

$5,267.08

8 children

$6,951

$5,561.50

9 children

$7,319

$5,855.92

10 children

$7,687

$6,150.33

Working out the withholding amount

To work out the amount you need to withhold, you must:

  1. Use the Monthly tax table to find the monthly amount to withhold from your employee’s earnings, allowing for any tax offsets claimed.
  2. Reduce this amount by the amount of the Medicare levy adjustment, worked out as detailed in Working out the Medicare levy adjustment.

Where the adjustment equals or exceeds the amount obtained in step 1, the amount to be withheld is nil.

Working out the Medicare levy adjustment

How you work out the Medicare levy adjustment varies depending on the number of dependent children your employee is claiming, see either:

Employee claiming spouse and/or one to five dependent children

Input the monthly earnings into the Medicare levy adjustment lookup tool (XLSX 34KB)This link will download a file and find the corresponding amount of Medicare levy adjustment in the appropriate column.

Example

The employee has monthly earnings of $1,950.40 and is claiming four dependent children on the Medicare levy variation declaration. Input $1,950.40 into the Medicare levy adjustment lookup tool (XLSX 34KB)This link will download a file and find the corresponding Medicare levy adjustment of $4.00 from the ‘4 children’ column.

End of example

Employee with more than five dependent children

How you work out the Medicare levy adjustment for an employee with more than five dependent children varies depending on the monthly earnings of your employee – refer to:

Monthly earnings less than $4,679

Use the ‘5 children’ column. Input the monthly earnings into the Medicare levy adjustment lookup tool (XLSX 34KB)This link will download a file and find the corresponding amount of Medicare levy adjustment from the ‘5 children’ column.

Example

The employee has monthly earnings of $1,958.20 and is claiming six dependent children. Input $1,958.20 into the Medicare levy adjustment lookup tool (XLSX 34KB)This link will download a file and find the corresponding Medicare levy adjustment of $4.00 from the ‘5 children’ column.

End of example

Monthly earnings of $4,679 or more but less than the column B amount that corresponds to the number of dependent children claimed

Round the monthly earnings down to the next dollar amount. Take 2% of that amount and round to the nearest dollar.

Example

The employee has monthly earnings of $4,779.60 and is claiming seven dependent children. Take 2% of $4,779.00 (the next lower dollar amount), this equals $95.58.

The Medicare levy adjustment is $96, rounded to the nearest dollar.

End of example

Monthly earnings of $4,679 or more and greater than the column B amount but less than the column A amount that corresponds to the number of dependent children claimed

Complete steps 1–4 below:

  1. Take 2% of the relevant column B amount. Round the result to the nearest cent.
  2. Take 8% of the difference between the monthly earnings (round down to the next dollar) and the column B amount. Round the result to the nearest cent.
  3. Subtract the result of step 2 from step 1.
  4. Round the result to the nearest dollar.

Example

The employee has monthly earnings of $5,633.67 and is claiming eight dependent children.

  1. 2% × $5,561.50 (column B amount for eight children)
    = $111.23
  2. 8% × ($5,633.00 − $5,561.50)
    = 8.0% × $71.50
    = $5.72
  3. $111.23 − $5.72
    = $105.51
  4. $106.00 ($105.51 rounded to the nearest dollar).

The Medicare levy adjustment is $106.

End of example

Using a formula

The withholding amounts shown in this tax table can be expressed in a mathematical form.

If you have developed your own payroll or accounting software package, refer to Statement of formulas for calculating amounts to be withheld.

PAYG withholding publications

You can access all PAYG withholding tax tables and other PAYG withholding publications at:

QC63816