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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 can 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 or incorrect

    You must withhold at the top rate of tax plus Medicare from any payment you make to an employee if they have neither:

    • 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 either us or your software 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 until the employee has provided a correct TFN.

    TFN code

    One of the following code numbers must be used in place of the TFN when a payee:

    • has not completed a TFN declaration
    • is not required to quote a TFN
    • has chosen not to quote a TFN, or
    • has provided an invalid TFN.
    Table: TFN code numbers and when to use them

    TFN code number

    When to use code number

    000000000

    Use if the payee has not provided a TFN, or fails to provide one within 14 days.

    111111111

    Use if you receive a declaration from the payee which says they have applied for a TFN.

    This code should be updated with the payee’s TFN, or, with the no TFN quoted code when the payee fails to provide the TFN to the payer within the 28 day period allowed.

    333333333

    Use if a payee is under 18 years old and claims the general exemption because they do not not earn enough for tax to be deducted.

    If circumstances change and the payee subsequently earns a level of income that attracts tax, a TFN will be required to be provided at that time.

    444444444

    Use if the payee is a recipient of a social security or service pension or benefit (other than Newstart, sickness allowance, special benefits or partner allowance) an exemption from quoting a TFN may be claimed.

    987654321

    Use if alphabetic characters appear in a TFN.

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    Last modified: 22 Oct 2020QC 27062