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  • Tax file number (TFN) declarations

    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

    The answers your payees provide on their Tax file number declaration (NAT 3092) determines 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.

    What if a TFN has not been provided?

    You must withhold 46.5% for residents and 45% for foreign residents from the taxable component, ignoring any cents if a super income stream payment is made to your payee and one of the following applies:

    • 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.

    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 (NAT 1432) 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 46.5% from any payment you make to a resident payee and 45% from a foreign resident payee and 45% from a foreign resident payee (ignoring any cents) unless we tell you not to.

    Attention

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

    • Higher Education Loan Program (HELP) debts
    •  Financial Supplement (FS) debts.
    End of attention

    What if your payee is under 18?

    There is no requirement for payees who are under 18 years of age to provide you with their TFN, provided that the payment you make to them does not exceed:

    • $350 per week (if you pay weekly)
    • $700 per fortnight (if you pay fortnightly)
    • $1,517 per month (if you pay monthly)

    What if your payee is a foreign resident?

    If your payee has answered no to the question ‘Are you an Australian resident for tax purposes?’ on their Tax file number declaration, you will need to use the foreign resident tax rates.

    There are two ways you can withhold from a foreign resident’s earnings:

    • If they have not given you a valid TFN, you need to withhold 45% for each $1 of earnings (ignoring any cents).
    • If they have given you a valid TFN, you need to withhold the amount calculated in the foreign resident tax rates below, rounding any cents to the nearest dollar.

    Foreign resident tax rates

    Weekly earnings
    $

    Weekly rate

    0 to 1,538

    32.5 cents for each dollar of earnings

    1,539 to 3,462

    $500 plus 37 cents for each $1 of earnings over $1,538

    3,463 and over

    $1,212 plus 45 cents for each $1 of earnings over $3,462

    Generally, foreign resident payees cannot claim tax offsets. In limited circumstances, they may be entitled to claim a zone or overseas forces offset. If your foreign resident payee has claimed a tax offset on the Tax file number declaration, you don’t need to make any adjustments to the amount you withhold.

    Last modified: 14 Jun 2013QC 25921