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  • When to work out the SFSS component

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    You will need to calculate the SFSS component when your employee has given you a Tax file number declaration or Withholding declaration and has:

    • answered yes to the question ‘Do you have a Financial Supplement debt?’
    • not completed a Medicare levy variation declaration claiming a reduction or exemption in the Medicare levy for having a spouse or dependants and low family income
    • claimed the tax-free threshold or is a foreign resident with earnings of one of the following:  
      • $1,074 or more if paid weekly
      • $2,148 or more if paid fortnightly
      • $4,654 or more if paid monthly
      • $13,962 or more if paid quarterly.
       

    If your employee has not claimed the tax-free threshold, the SFSS component is calculated on earnings of:

    • $724 or more if paid weekly
    • $1,448 or more if paid fortnightly
    • $3,137.33 or more if paid monthly
    • $9,412 or more if paid quarterly.

    You must withhold the SFSS component from all your employee's earnings, including taxable allowances, bonuses and commissions.

    Examples

    1. Employee has claimed the tax-free threshold and has weekly earnings of $1,238.24.
      SFSS component = $1,238.99 × 2% = $25.00 rounded to the nearest dollar.
    2. Employee has claimed the tax-free threshold and has fortnightly earnings of $2,311.59.
      Weekly equivalent of $2,311.59 = $1,155.99 ($2,311.59 divided by two, ignoring cents and adding 99 cents).
      Weekly SFSS component = $1,155.99 × 2% = $23.00 rounded to the nearest dollar.
      Fortnightly SFSS component = $46.00 ($23.00 × 2).
    3. Employee has claimed the tax-free threshold and has monthly earnings of $5,689.21.
      Weekly equivalent of $5,689.21 = $1,312.99
      ($5,689.21 × 3/13, ignoring cents and adding 99 cents).
      Weekly SFSS component = $1,312.99 × 2% = $26.00 rounded to the nearest dollar.
      Monthly SFSS component = $113.00 ($26.00 × 13/3, rounded to the nearest dollar).
    End of example

    Do not withhold any amount for HELP/SSL/TSL or Financial Supplement debts from lump sum termination payments.

    Rounding of withholding amounts to the nearest dollar

    Withholding amounts calculated as a result of applying the formulas are rounded to the nearest dollar. Results ending in 50 cents are rounded to the next higher dollar.

    Accounting software

    Software written in accordance with the formulas in this schedule should be tested for accuracy against the sample data. The results obtained when using the coefficients in this schedule may differ slightly from the sums of the amounts shown in the PAYG tax tables. The differences result from the rounding of components.

    Last modified: 14 Jun 2017QC 52075