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  • Tax file number and withholding declarations

    Each of your employees should complete a Tax file number declaration. This allows you to work out the amount you withhold from payments to the employee.

    You must lodge completed tax file number (TFN) declarations with us. Lodging online is a quick and secure way to meet your reporting obligations. A valid Tax file number declaration must be in place before your employee can authorise you to vary their withholding by providing a Withholding declaration. They must give you a completed Withholding declaration if they want to:

    • claim an entitlement to tax offsets by having a reduced amount withheld from payments made to them
    • advise you of changes to their  
      • tax-free threshold
      • residency status
      • HELP, Trade Support Loan or Financial Supplement debt.

    A withholding declaration takes effect from the first payment you make after the employee has provided the declaration.

    You do not need to send completed withholding declarations to us - keep the declarations with your employee records.

    Your employees are able to complete these forms in ATO Online through myGov. Ask your software developer or payroll service provider if your software offers online commencement forms.

    See also:

    Tax file number (TFN) not provided

    You must withhold at the top rate of tax plus Medicare from any payment you make to an employee if they have either not:

    • supplied their TFN
    • claimed an exemption from quoting their TFN
    • advised you that they have applied for a TFN or have made an enquiry with us about this.

    If the employee has lodged a Tax file number – application or enquiry for individuals (NAT 1432) with us, they have 28 days to provide you with their TFN. If they still haven't given you their TFN within 28 days, you must withhold at the top tax rate plus Medicare.

    If you are advised by us that the employee has quoted an incorrect TFN on their TFN declaration, you will also need to withhold at the top tax rate for resident payees.

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    See also:

    Last modified: 30 Apr 2019QC 27062