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  • Withholding limit



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

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    If your payee has a Higher Education Loan Program (HELP) or Financial Supplement (FS) debt, see Help, SFSS and additional payments.

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    If you use Method A or Method B (ii), the amount of tax to be withheld from an additional payment is limited to a maximum of 46.5% of the additional payment. If the withholding amount calculated (including a HELP or FS component) using Method A or Method B (ii) exceeds 46.5% of the additional payment being made, then the amount is reduced to be equal to 46.5% of that payment. The withholding limit applies to the additional payment only and not to normal earnings for the current pay period.

    For some payees, the withholding limit may result in their withholding amounts not being sufficient to cover their end-of-year tax liability, as their total earnings for the financial year may exceed the HELP or FS repayment threshold or attract a higher rate of tax. Under these circumstances, your payee can arrange an upwards variation by entering into an agreement with you to vary the rate or amount of withholding. You and your payee need to complete a Withholding declaration – upwards variation.

    For more information about withholding variations, refer to:

    For more information about HELP and FS repayment thresholds, refer to:

    Last modified: 29 Oct 2013QC 34732