• Weekly Levy Adjustment (WLA)

    Where scale 2 is applied

    Where weekly earnings are $410 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 $512, WLA = (x – 410.29) × 0.1
    2. If x is $512 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 $692 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 $865, WLA = (x – 692.33) × 0.05
    2. If x is $865 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 $512, WLA is calculated using formula (1):

    WLA = (465.99 – 410.29) × 0.1
    = 5.5700 or $6.00 (rounded to the nearest dollar).

    End of example

     

    Example 2

    Employee's weekly earnings are $869.47 and the number of children claimed at question 12 is three. Scale 6 is applied.

    x = 869.99
    WFT = ([3,306 × 3] + 36,001) ÷ 52
    = 883.0577 or $883.06 (rounded to the nearest cent)

    As x is greater than $865 and less than WFT, WLA is calculated using formula (2):

    WLA = 869.99 × 0.01
    = 8.6999 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 = ([3,306 × 4] + 36,001) ÷ 52
    = 946.6346 or $946.63 (rounded to the nearest cent).

    SOP = (946.63 × 0.1) ÷ 0.08
    = 1,183.2875 or $1,183 (ignoring cents).

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

    WLA = (946.63 × 0.020) – ([982.99 – 946.63] × 0.0800)
    = 16.0238 or $16.00 (rounded to the nearest dollar)

    End of example

    Fortnightly levy adjustment

    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 = ([3,306 × 1] +36,001) ÷ 52

    = 755.9038 or $755.90 (rounded to the nearest cent).

    SOP = (755.90 × 0.1) ÷ 0.08

    = 944.8750 or $944 (ignoring cents).

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

    WLA = (755.90 × 0.020) – ([797.99 – 755.90] × 0.0800)

    = 11.7508 or $12.00 (rounded to the nearest dollar).

    The fortnightly levy adjustment is therefore $24.00 ($12.00 x 2)

    End of example

    Monthly levy adjustment

    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 = $692.33

    As x is greater than $512 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

    Quarterly levy adjustment

    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 = 1103.99

    Weekly withholding amount (y)

    = (a × x) – b

    = (0.3477 × 1103.99) – 165.4435

    = 218.4138 or $218.00 (rounded to nearest dollar)

    Levy adjustment: weekly earnings are greater than WFT ($1010.21) and less than the SOP ($1,262) appropriate to employee with five children. Formula (3) applies.

    = (1010.21 × 0.0200) – ([1103.99 – 1010.21] × 0.0800)

    = 20.2042 – 7.5024

    = 12.7018 or $13.00 (rounded to nearest dollar)

    Net weekly withholding amount

    $218.00 – $13.00 = $205.00

    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 $4,156.33. 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 $944 appropriate to an employee with one child.

    Therefore, scale 2 is applied.

    Convert to weekly equivalent

    = ($4,156.33 + 0.01) × 3 ÷ 13

    = 959.1554 or $959 (ignore cents)

    x = 959.99

    Weekly withholding amount (y)

    = (a × x) – b

    = (0.3477 × 959.99) – 165.4435

    = 168.3450 or $168.00 (rounded to nearest dollar)

    Monthly withholding amount

    $168.00 × 13 ÷ 3 = $728.00 (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

    $728.00 – $113.00 = $615.00

    End of example
    Last modified: 16 Sep 2016QC 50006