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  • Using a formula

    The withholding amounts shown in this schedule can be expressed in a mathematical form.

    If you have developed your own payroll software package, you can use the formulas and the coefficients outlined in table A and table B.

    This section should be read with Statement of formulas for calculating amounts to be withheld.

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

    • y is the weekly withholding amount expressed in dollars
    • x is the weekly earnings rounded down to whole dollars plus 99 cents, and
    • a and b are the values of the coefficient for the formulas as shown in tables A and B.

    Table A: Employee has claimed the tax-free threshold

    Coefficients where tax-free threshold claimed

    Weekly earnings
    (x) less than

    a

    b

    $443

    0

    0

    $528

    0.1520

    67.4635

    $660

    0.2320

    109.7327

    $889

    0.1680

    67.4635

    $1,602

    0.2782

    165.4423

    $2,163

    0.2760

    161.9808

    $4,326

    0.3120

    239.8654

    $4,326 & over

    0.3760

    516.7885

    Table B: Employee has not claimed the tax-free threshold

    Coefficients where tax-free threshold not claimed

    Weekly earnings
    (x) less than

    a

    b

    $90

    0.1520

    0.1520

    $451

    0.1874

    3.2130

    $1,165

    0.2782

    44.2476

    $1,725

    0.2760

    41.7311

    $3,889

    0.3120

    103.8657

    $3,889 & over

    0.3760

    352.7888

    To work out withholding amounts using the formulas, you must:

    1. Ignore any cents, multiply the per performance earnings by the number of performances for the week to derive the weekly equivalent. Add 99 cents to the result.
    2. Calculate the weekly amount by applying the relevant coefficients from table A or B above, rounding to the nearest dollar.
    3. Divide this amount by the number of performances for the week to work out the per performance withholding amount. Multiply this amount by the number of performances per day to convert it to the daily earnings equivalent. Round the daily withholding amount to the nearest dollar.

    If you pay your employees daily rather than per performance, the amount to withhold (including reductions for tax offsets) should be worked out on a daily basis.

    Example

    Sandra has two performances for the week, one on Thursday and one on Saturday. Sandra earns $500.35 for each performance. She has claimed the tax-free threshold.

    1. $500 × 2 = $1,000. Add 99 cents to the result = $1,000.99.
    2. $1,000.99 × 0.2782 − 165.4423 = $113.0331. Round to the nearest dollar = $113.
    3. $113 ÷ 2 = $56.50. Round to the nearest dollar = $57.

    Therefore, the amount to withhold from each performance is $57. As there is only one performance per day, the daily withholding amount is the same as the per performance withholding amount.

    End of example

    Accounting software

    Software written in accordance with the formulas in this schedule should be tested for accuracy against the Withholding look-up tool (XLSX 58KB)This link will download a file. The results obtained when using the coefficients in this schedule may differ slightly from the Withholding look-up tool. The differences result from the rounding of components.

    Last modified: 14 Jun 2019QC 55455