Schedule 8 – Statement of formulas for calculating study and training support loans components

The coefficients in this schedule should be used together with the Statement of formulas for calculating amounts to be withheld.

Use this statement of formulas for payments made from 1 July 2023 to 30 June 2024.

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 Subdivisions 12-B (except sections 12-50 and 12-55), 12-C (except sections 12-85 and 12-90) and 12-D of Schedule 1 to the TAA.

Using this schedule

You should use this schedule if you develop your own payroll or accounting software package. Formulas and coefficients are used for calculating weekly withholding amounts for employees who have a:

• Higher Education Loan Program (HELP) debt
• VET Student Loan (VSL) debt
• Financial Supplement (FS) debt
• Student Start-up Loan (SSL) debt (includes ABSTUDY SSL debts), or
• Trade Support Loan (TSL) debt.

You can also use the:

• Tax withheld calculator to help you work out the correct amount of tax to withhold from payments to most employees
• Statement of formulas for calculating study and training support loans components (NAT 3539, PDF 476KB)This link will download a file which you can download and print.

Using a formula

The withholding amounts for employees who have a study and training support loans debt can be expressed in a mathematical form.

If you have developed your own payroll or accounting software package, use the formulas and component rates outlined below.

The formulas comprise linear equations of the form y = ax, where:

• y is the weekly study and training support loans component
• x is the weekly earnings – or weekly equivalent of earnings – rounded down to whole dollars plus 99 cents
• a is the value of the component rate as shown in the following tables.

Study and training support loans component rates

Calculating fortnightly, monthly or quarterly withholding amounts

First calculate the weekly equivalent of fortnightly, monthly or quarterly earnings. If you pay:

• fortnightly – divide the sum of the fortnightly earnings and the amount of any allowances subject to withholding by 2. Ignore any cents in the result and then add 99 cents
• monthly – obtain the sum of the monthly earnings and the amount of any allowances subject to withholding (if the result is an amount ending in 33 cents, add one cent). Multiply this amount by 3 and then divide by 13. Ignore any cents in the result and then add 99 cents
• quarterly – divide the sum of the quarterly earnings and the amount of any allowances subject to withholding by 13. Ignore any cents in the result and then add 99 cents.

Then calculate fortnightly, monthly or quarterly withholding amounts as follows:

• fortnightly – determine the rounded weekly withholding amount applicable to the weekly equivalent of earnings before any adjustment for tax offsets. Multiply this amount by 2
• monthly – determine the rounded weekly withholding amount applicable to the weekly equivalent of earnings before any adjustment for tax offsets. Multiply this amount by 13, divide the product by 3 and round the result to the nearest dollar
• quarterly – determine the rounded weekly withholding amount applicable to the weekly equivalent of earnings before any adjustment for tax offsets. Multiply this amount by 13.

When to work out the study and training support loans component

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

• answered yes to the question on whether they have a
  • Higher Education Loan Program (HELP) debt
  • VET Student Loan (VSL) debt
  • Financial Supplement (FS) debt
  • Student Start-up Loan (SSL) debt (including ABSTUDY SSL debts) or
  • Trade Support Loan (TSL) 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
  • $991 or more if paid weekly
  • $1,982 or more if paid fortnightly
  • $4,294.33 or more if paid monthly
  • $12,883 or more if paid quarterly.
   

If your employee has not claimed the tax-free threshold, the study and training support loans component is calculated on earnings of:

• $641 or more if paid weekly
• $1,282 or more if paid fortnightly
• $2,777.67 or more if paid monthly
• $8,333 or more if paid quarterly.

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

Do not withhold any amount for study and training support loans debts from lump sum termination payments.

Rounding of withholding amounts

Withholding amounts calculated as a result of applying the above formulas are rounded to the nearest dollar. Values ending in 50 cents are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Software

Payroll or accounting software written in accordance with the formulas in this schedule should be tested for accuracy against the sample data provided at Tax tables. The results obtained when using the coefficients in this schedule may differ slightly from the sums of the amounts shown in the pay as you go (PAYG) tax tables. The differences result from the rounding of components. Withholding calculated using either method is accepted.

Coefficients to work out the weekly amounts to withhold

Your employee’s total withholding, including the study and training support loans component, can be calculated using the formula and coefficients stated below.

Using a formula

The formulas comprise linear equations of the form y = ax − b, where:

• y is the weekly withholding amount expressed in dollars
• x is the number of whole dollars in the weekly earnings plus 99 cents
• a and b are the values of the coefficients for each set of formulas for each range of weekly earnings (or, in the case of fortnightly, monthly or quarterly earnings, the weekly equivalent of these amounts).

If two employees are taxed using a particular scale (for example, scale 2) but only one of them has a study and training support loans debt, you will need to set up two separate scales in your payroll system. One scale will need to incorporate the study and training support loans component and one will not – for example, name one ‘scale 2’ and the other ‘scale 22’.

The study and training support loans component does not apply if the employee has not provided a tax file number (TFN).

For scales without the study and training support loans component, refer to Statement of formulas for calculating amounts to be withheld.

Where tax-free threshold not claimed in Tax file number declaration – scale 1

Note: Scale 1 contains a negative value for one of the 'b' coefficients. This is intentional.

Where employee has claimed the tax-free threshold in Tax file number declaration – scale 2

Foreign residents – scale 3

Where employee claimed FULL exemption from Medicare levy in Medicare levy variation declaration – scale 5

Where employee claimed HALF exemption from Medicare levy in Medicare levy variation declaration – scale 6

Note: Withholding amounts including the study and training support loans component worked out using the coefficients may differ slightly from the sums of the amounts shown in the PAYG and study and training support loans tax tables. The differences result from the rounding of components. Withholding calculated using either method is accepted.

PAYG withholding publications

You can access all PAYG withholding tax tables and other PAYG withholding publications at:

• Tax tables
• PAYG withholding.