Show download pdf controls
  • Schedule 13 – Tax table for superannuation income streams

    For payments made on or after 1 July 2016 to 30 September 2016

    This document is a withholding schedule made by the Commissioner of Taxation in accordance with sections 15-25 and 15-30 of Schedule 1 to the Taxation Administration Act 1953 (TAA). It applies to withholding payments covered by paragraph 12-80(a) of Schedule 1 to the TAA.

    Using this table

    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 should use this table if you make a payment of a super income stream, including a:

    • transition to retirement income stream
    • temporary or permanent disability income stream
    • super death benefit income stream to a dependant.

    Super income streams

    A super income stream is a series of regular payments from a super fund when the member has satisfied a condition of release. These regular payments can be paid weekly, fortnightly, monthly, quarterly or annually.

    The following payments are not super income stream payments:

    • commutation of an income stream; this is a super lump sum
    • an amount paid which the member elected to be treated as a super lump sum prior to the payment being made from the income stream.

    See also:

    Components of a super income stream

    Before you can work out the withholding amount, you must calculate the components of the super income stream.

    A super income stream may have two components:

    • tax-free component
    • taxable component which can include either or both of an
      • element taxed in the fund (taxed element)
      • element untaxed in the fund (untaxed element).
       

    You do not withhold from the tax-free component.

    Tax file number (TFN) declarations

    The answers your payees provide on their Tax file number declaration determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from a payee, it will override the previous one.

    If a payee does not give you a valid Tax file number declaration within 14 days of starting a payer/payee relationship, you must complete a Tax file number declaration with all available details of the payee and send it to us.

    When a TFN has not been provided

    You must withhold 49% for residents and 47% for foreign residents from the taxable component (ignoring any cents), if a super income stream payment is made to your payee and all of the following apply:

    • they have not quoted their TFN
    • they have not claimed an exemption from quoting their TFN
    • they have not advised you that they have applied for a TFN or have made an enquiry with us.

    However, if your payee is 60 years old or above, you can only withhold from the untaxed element of the taxable component.

    If a payee states at question 1 of the Tax file number declaration they have lodged a Tax file number – application or enquiry for individuals with us, they have 28 days to provide you with their TFN.

    If the payee has not given you their TFN within 28 days, you must withhold 49% from any payment you make to a resident payee and 47% from a foreign resident payee from the relevant element(s) of the taxable component of the super income stream payment (ignoring any cents) unless we tell you not to.

    Do not allow for any tax offsets or Medicare levy adjustments. Do not withhold any amount for:

    • Higher Education Loan Program (HELP) debts
    • Student Start-up Loan (SSL) debts
    • Trade Support Loan (TSL) debts
    • Financial Supplement debts.

    Working out the withholding amount

    Factors to consider when working out the withholding amount include:

    • whether the payee is an Australian resident or foreign resident for tax purposes
    • the age of the payee
    • the frequency of the income stream payments – for example, fortnightly, monthly
    • whether the payee is claiming the tax-free threshold
    • whether the payee is claiming the seniors and pensioners tax offset
    • whether the income stream includes an untaxed element (generally payments from state and Commonwealth public sector super schemes)
    • whether the income stream is a death benefit income stream

    Payments to Australian residents

    This table is divided into three parts. The amount required to be withheld from the taxable component of a super income stream can be calculated using the following:

    • the taxable component is comprised wholly of a taxed element – use part A
    • the taxable component contains an untaxed element – use part B
    • the payment is a super death benefit income stream – use part C.

    Payments to foreign residents

    If the income stream is to be made to a foreign resident, you will need to check if there is a tax treaty with their country of residence. If the super income stream is assessable in the other country because of the treaty, no withholding is required.

    If a foreign resident's income stream is assessable in Australia, you are required to withhold from the payment.

    See also:

    Rounding of withholding amounts

    Withholding amounts calculated using formulas should be rounded to the nearest dollar. Results ending in exactly 50 cents are rounded to the next highest dollar. Do this rounding directly; do not make a preliminary rounding to the nearest cent. Where no TFN has been provided, cents are ignored when withholding amounts are calculated.

    Part A: Taxable component is comprised wholly of a taxed element

    Step 1 Use the following table to work out whether the taxed element of the taxable component is subject to withholding. If the taxable component contains an untaxed element, go to part B.

    Where withholding applies, by age

    Age

    Withholding applies to:

    Below 60 years

    Taxed element

    60 years and over

    No withholding

    If your payee is 60 years of age or over, no withholding is required from the taxed element.

    If your payee is less than 60 years of age, go to step 2.

    Step 2 Use the appropriate PAYG withholding tax table to calculate the withholding amount relevant to the amount worked out at step 1. The tax table you use depends on the period the income stream covers – that is, weekly, fortnightly or monthly payments.

    Step 3 Some payees may be eligible for a tax offset. Use the following table to calculate the tax offset amount.

    Super income stream – taxed element

    Age

    Tax offset

    Below preservation age

    Nil

    Preservation age to below 60 years

    Taxed element × 15%

    Disability super income stream – taxed element

    Age

    Tax offset

    Below preservation age

    Taxed element × 15%

    Preservation age to below 60 years

    Taxed element × 15%

    See also:

    Step 4 For some payees, the application of the offset from step 3 leads to under withholding for their Medicare levy. An offset adjustment is required. Use the applicable formulas below to calculate the offset adjustment amount (you will need to calculate the weekly equivalent of the taxable component if making fortnightly, monthly or quarterly payments).

    Adjustment amounts per taxable component amount

    Taxable component amount
    (on a weekly basis)

    Offset adjustment amount

    Less than the Medicare levy threshold for singles

    Nil

    Greater than the Medicare levy threshold for singles, but less than the Medicare levy shade out point (SOP) for singles

    (Taxable component - Medicare levy threshold for singles) x 0.10

    Greater than or equal to the Medicare levy SOP for singles, but less than $934

    Taxable component x 0.02

    Greater than $933

    Nil

    Medicare levy parameters are contained in Statement of formulas for calculating amounts to be withheld.

    Step 5 Calculate the notional amount to withhold by first subtracting the tax offset per payment (step 3) from the withholding amount (step 2).

    Notional amount to withhold = withholding amount – tax offset

    Then compare the notional amount to withhold with the offset adjustment amount calculated at step 4.

    If the notional amount to withhold is:

    • less than the amount calculated at step 4, withhold the amount calculated at step 4
    • more than the amount calculated at step 4, withhold the notional amount to be withheld.

    Examples

    These examples use the PAYG withholding tax tables that apply from 1 July 2015.

    Case A: Taxable component comprised wholly of a taxed element

    Example 1

    Courtney is 61 and is receiving a fortnightly super income stream of $1,000.

    The tax-free component of Courtney’s fortnightly super income stream is $200.

    The taxable component of the super income stream is $800.

    As Courtney is over 60 years old and her taxable component is comprised wholly of a taxed element, no withholding is required.

    Example 2

    Maree is 56 and is receiving a fortnightly super income stream of $1,200. Maree’s preservation age is 55.

    The tax-free component of Maree’s fortnightly super income stream is $300. The taxable component of Maree’s super income stream is $900.

    Step 1: As Maree is 56, withholding applies to the taxable component.

    Step 2: As Maree is paid fortnightly, use the Fortnightly tax table to work out the withholding required from the $900 taxed element. This amount is $48, assuming that Maree is claiming the tax-free threshold.

    Step 3: Maree is entitled to a tax offset.

    Tax offset = taxed element x 15%

    = $900 x 15%

    = $135

    Step 4: Calculate Maree’s fortnightly offset adjustment amount. As Maree’s fortnightly payment is more than $790 (the Medicare levy threshold for singles, on a fortnightly basis) but less than $986 (the Medicare levy SOP for singles, on a fortnightly basis), her offset adjustment amount is calculated as:

    Offset adjustment amount = (Taxable component - Medicare levy threshold for singles) x 0.10

    = ($900 – $790) x 0.10

    = $11.00

    = $11 per fortnight (rounded to the nearest dollar)

    Maree’s offset adjustment amount is $11 per fortnight.

    Step 5: To calculate the notional withholding amount, reduce the withholding amount ($48 as worked out in step 2) by the value of the tax offset ($135 as worked out in step 3). That is:

    Notional withholding amount = $48 – $135

    = -$87

    Since the notional withholding amount is negative and less than the offset adjustment amount, the amount to be withheld from Maree’s fortnightly super income stream is $11. This is the offset adjustment amount which will cover the Medicare levy payable.

    End of example
    Last modified: 16 Sep 2016QC 48970