• Schedule 23 PAYGW - special tax table for payments to individuals performing work or services in JPDA: October 2005

    Overview

    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

    This is available below and also as a downloadable pdf (2 pages).

    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. It applies to withholding payments covered by Subdivision 12-B of Schedule 1.

    Who should use this table?

    You should use this tax table if you make payments to individuals for work or services performed in the JPDA where:

    • the payment is covered by Subdivision 12-B of Schedule 1 to the Taxation Administration Act 1953, and
    • the payee has provided you with a valid Tax file number declaration.

    Rounding of withholding amounts

    Any withholding amount calculated using this table should be rounded to the nearest dollar, with amounts ending in 50 cents being rounded upwards.

    How to work out withholding amounts

    If the payee is a resident of Australia for taxation purposes

    The Australian tax amount to be withheld is the amount:

    Less

    • 18% of the salary and wage income paid in the relevant period for services performed in the JPDA.

    This is because 90% of the JPDA amount is also subject to tax in Timor-Leste (formerly East Timor) at the rate of 20%, and 90% of 20% is 18%.

    Attention

    The amount you are required to withhold under the laws of Timor-Leste may be greater than the amount by which you reduce the amount of Australian tax withheld. This is because the amount subject to tax in Timor-Leste may include superannuation and other benefits. For example, an Australian resident receives a monthly payment of $10,000 for work in the JPDA and an additional amount of $1,000 is paid into a superannuation fund for the payee. The amounts withheld for Australian tax (and any foreign tax credit) would be based on $10,000, while the tax paid to Timor-Leste would be based on $11,000.

    End of attention

    If the payee is a resident of Timor-Leste for taxation purposes

    The Australian tax amount to be withheld from each payment depends on whether the payment is wholly JPDA income or if it also includes other income.

    • If the payment is JPDA income only, the amount to be withheld from each payment is 2.9% (that is, 10% of the minimum non-resident tax rate of 29%) of the gross amount of the payment.
    • If the payment includes JPDA and non-JPDA income the amount to be withheld from each payment is worked out using the formula:

    tax at foreign resident tax rates
    total income

    X (10% of JPDA income + non-JPDA income)

    If the payee is not a resident of either Australia or Timor-Leste

    The Australian tax amount to be withheld from each payment depends on whether the payment is wholly JPDA income or if it also includes other income.

    • If the payment is JPDA income only, the amount to be withheld from each payment is 10% of the amount which would otherwise be withheld from that payment if the payee was a foreign resident.
    • If the payment includes JPDA and non-JPDA income the amount to be withheld from each payment is worked out using the formula:

    tax at foreign resident tax rates
    total income

    X (10% of JPDA income + non-JPDA income)

    Completing the payment summary

    When issuing the payee with their PAYG payment summary - individual non-business (NAT 0046), you will need to show the:

    • full amount of salary and wages in the 'Gross payments' box, and
    • Australian tax withheld in the 'Total tax withheld' box.

    Other information required by the payee

    The payer must advise:

    • all payees that receive JPDA income - of the amount of JPDA income included in their 'Gross payments', and
    • payees who are taxed at Australian resident tax rates - of the amount of tax paid to Timor-Leste for the period covered by the payment summary.

    If you receive payment for working or providing services in the JPDA

    You must lodge an Australian income tax return so that your Australian tax can be correctly assessed. Use a copy of the Joint Petroleum Development Area instruction sheet (NAT 8277) to help you accurately complete your tax return and calculate your tax credit for amounts paid to Timor-Leste.

    PAYG withholding publications

    All PAYG withholding tax tables and other PAYG publications can be accessed quickly and easily from the Forms and Services page.

    Copies of weekly and fortnightly tax tables are available from most newsagents. Newsagents also hold copies of the Tax file number declaration and the Withholding declaration.

    Examples

    Example 1 - Resident of Australia

    A payee receives a payment of $10,000 for a particular month which includes $8,000 of JPDA income. They also have $1,000 paid into a superannuation fund. The payee is claiming the tax-free threshold on their Tax file number declaration, has not lodged a Withholding declaration and is not entitled to leave loading. The amount to be withheld under the PAYG withholding - monthly tax table incorporating Medicare levy with and without leave loading (NAT 1007) effective from 1 July 2005 would be $3,484, and 18% of $8,000 is $1,440. The amount to be withheld and paid to the Australian Taxation Office is $2,044 ($3,484 - $1,440). The tax payable to Timor-Leste would be based on the total entitlement of the payee, that is $9,000 (JPDA income of $8,000 plus the superannuation payment of $1,000).

    Example 2 - Resident of Timor-Leste and payment is all JPDA income

    A payee receives a payment of $10,000 for a particular month. The amount to be withheld and paid to the Australian Taxation Office is $290 ($10,000   2.9%).

    Example 3 - Not a resident of Australia or Timor-Leste and payment is all JPDA income

    A payee receives a payment of $10,000 for a particular month. The amount which would be withheld (if the rates for non residents included in the PAYG withholding - monthly tax table incorporating Medicare levy with and without leave loading [NAT 1007] effective from 1 July 2005 was used) is $3,655. After rounding cents, the amount to be withheld and paid to the Australian Taxation Office is $366 ($3,655   10%).

    Example 4 - Not a resident of Australia or Timor-Leste and payment is JPDA and non-JPDA income

    A payee receives a payment of $10,000 for a particular month which includes $8,000 of JPDA income. The amount which would be withheld (if the rates for non-residents included in the PAYG withholding - monthly tax table incorporating Medicare levy with and without leave loading [NAT 1007] effective from 1 July 2005 was used) is $3,655. After rounding cents, the amount to be withheld and paid to the Australian Taxation Office is $1,023 ([$3,655   $10,000] x [$800 + $2,000]).

    Last modified: 24 Jul 2012QC 17574