• Weekly Levy Adjustment (WLA)

Where scale 2 is applied

Where weekly earnings are \$422 or more but less than the SOP, the WLA is derived by applying the weekly earnings (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly earnings), in the following formulas:

1. If x is less than \$528, WLA = (x − 422.69) × 0.1
2. If x is \$528 or more but less than WFT, WLA = x × 0.0200
3. If x is equal to or greater than WFT and less than the SOP, WLA =
(WFT × 0.0200) − ([x − WFT] × 0.0800)

Where scale 6 is applied

Where weekly earnings are \$713 or more but less than the SOP, the WLA is derived by applying the weekly earnings (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly earnings), in the following formulas:

1. If x is less than \$891, WLA = (x − 713.25) × 0.05
2. If x is \$891 or more but less than WFT, WLA = x × 0.0100
3. If x is equal to or greater than WFT and less than the SOP, WLA =
(WFT × 0.0100) − ([x − WFT] × 0.0400)

In each case WLA should be rounded to the nearest dollar.

Values ending in 50 cents should be rounded to the next higher dollar.

Examples

Example 1

Employee’s weekly earnings are \$465.33 and scale 2 is applied.

x = 465.99

As x is less than \$528, WLA is calculated using formula (1):

WLA = (465.99 − 422.69) × 0.1
= 4.3300 or \$4.00 (rounded to the nearest dollar).

End of example

Example 2

Employee's weekly earnings are \$892.47 and the number of children claimed at question 12 is three. Scale 6 is applied.

x = 892.99
WFT = ([3,406 × 3] + 37,089) ÷ 52
= 909.7500 or \$909.75 (rounded to the nearest cent)

As x is greater than \$891 and less than WFT, WLA is calculated using formula (2):

WLA = 892.99 × 0.01
= 8.9299 or \$9.00 (rounded to the nearest dollar).

End of example

Example 3

Employee’s weekly earnings are \$982.29 and the number of children claimed at question 12 is four. Scale 2 is applied.

x = 982.99
WFT = ([3,406 × 4] + 37,089) ÷ 52
= 975.2500 or \$975.25 (rounded to the nearest cent).

SOP = (975.25 × 0.1) ÷ 0.08
= 1,219.0625 or \$1,219 (ignoring cents).

As x is greater than WFT and less than SOP, WLA is calculated using formula (3):

WLA = (975.25 × 0.020) − ([982.99 − 975.25] × 0.0800)
= 18.8858 or \$19.00 (rounded to the nearest dollar)

End of example

Multiply rounded weekly levy adjustment by two.

Example

Employee’s fortnightly earnings are \$1,595.52 and the number of children claimed at question 12 is one. Scale 2 is applied.

Equivalent weekly earnings = \$1,595.52 ÷ 2

= \$797.76

x = 797.99

WFT = ([3,406 × 1] + 37,089) ÷ 52

= 778.7500 or \$778.75 (rounded to the nearest cent).

SOP = (778.75 × 0.1) ÷ 0.08

= 973.4375 or \$973 (ignoring cents).

As x is greater than WFT and less than SOP, formula (3) is used:

WLA = (778.75 × 0.020) − ([797.99 − 778.75] × 0.0800)

= 14.0358 or \$14.00 (rounded to the nearest dollar).

The fortnightly levy adjustment is therefore \$28.00 (\$14.00 × 2)

End of example

Multiply rounded weekly levy adjustment by 13 and divide the result by three. The result should be rounded to the nearest dollar.

Example

Employee’s monthly earnings are \$2,800.33 and has a spouse but no children. Scale 2 is applied.

Equivalent weekly earnings = (\$2,800.33 + 0.01) × 3 ÷ 13

= \$646.23

x = 646.99

WFT = \$713.25

As x is greater than \$528 and less than WFT, formula (2) applies:

WLA = 646.99 × 0.0200 = 12.9398 or \$13.00 (rounded to the nearest dollar).

The monthly adjustment is therefore \$56.00 (\$13.00 × 13 ÷ 3, rounded to the nearest dollar).

End of example

Multiply rounded weekly levy adjustment by 13.

General examples

Example 1

Employee's weekly earnings are \$1,103.45. Employee has completed a Tax file number declaration claiming the tax-free threshold. The employee has also provided a Medicare levy variation declaration with five children shown at question 12.

Therefore, scale 2 is applied.

x = 1,103.99

Weekly withholding amount (y)

= (a × x) − b

= (0.3477 × 1,103.99) − 165.4423

= 218.4150 or \$218.00 (rounded to nearest dollar)

Levy adjustment: weekly earnings are greater than WFT (\$1,040.75) and less than the SOP (\$1,300) appropriate to employee with five children. Formula (3) applies.

= (1,040.75 × 0.0200) – ([1,103.99 − 1,040.75] × 0.0800)

= 20.8150 − 5.0592

= 15.7558 or \$16.00 (rounded to nearest dollar)

Net weekly withholding amount

\$218.00 − \$16.00 = \$202.00

End of example

Example 2

Employee's fortnightly earnings are \$1,110.30. Employee resides in zone B, has provided a Tax file number declaration that claims the tax-free threshold and a Withholding declaration that claims zone and tax offsets at the tax offsets questions that totals \$1,645. The employee has also lodged a Medicare levy variation declaration claiming a full exemption from the Medicare levy.

Therefore, scale 5 is applied.

Convert to weekly equivalent

= (1,110.30 ÷ 2)

= 555.15 or \$555 (ignore cents)

x = 555.99

Weekly withholding amount (y)

= (a × x) − b

= (0.1900 × 555.99) − 67.4635

= 38.1746 or \$38.00 (rounded to nearest dollar)

Fortnightly withholding amount

\$38.00 × 2 = \$76.00

Tax offsets claimed at the tax offsets questions on the Withholding declaration

= 3.8% of \$1,645

= 62.5100 or \$63.00 (rounded to nearest dollar)

Net fortnightly withholding amount

\$76.00 − \$63.00 = \$13.00.

End of example

Example 3

Employee's monthly earnings are \$4,316.33. Employee has provided a Tax file number declaration claiming the tax-free threshold and claimed a total tax offset of \$1,365 at the tax offsets question on the Withholding declaration. The employee has one child but is not eligible for a Medicare levy adjustment. The weekly equivalent of the employee’s earnings exceeds the Medicare levy SOP of \$973 appropriate to an employee with one child.

Therefore, scale 2 is applied.

Convert to weekly equivalent

= (\$4,316.33 + 0.01) × 3 ÷ 13

= 996.0785 or \$996 (ignore cents)

x = 996.99

Weekly withholding amount (y)

= (a × x) − b

= (0.3477 × 996.99) − 165.4423

= 181.2111 or \$181.00 (rounded to nearest dollar)

Monthly withholding amount

\$181.00 × 13 ÷ 3 = \$784.00 (rounded to nearest dollar)

Tax offset claimed

= 8.3% of \$1,365

= 113.2950 or \$113.00 (rounded to nearest dollar)

Net monthly withholding amount

\$784.00 − \$113.00 = \$671.00

End of example