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  • Tax file number and withholding declarations

    New employees must complete a tax file number (TFN) declaration. They may also complete a withholding declaration.

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    TFN declaration

    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 TFN declaration details with us, unless your employee has completed the employee commencement forms in ATO Online Services.

    Lodging TFN declaration data online is a quick and secure way to meet your reporting obligations.

    Withholding declaration

    A valid TFN 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 a tax offset 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.

    Don't send completed withholding declarations to us – keep the declarations with your employee records.

    Employee commencement forms

    Employee commencement forms are an alternative to your employee completing a paper Tax file number declaration and Withholding declaration.

    Your employees can access the commencement forms, either:

    • directly through ATO online services
    • through a link to ATO online services sent from your software – ask your software provider if this service is offered.

    If your employee directly accesses the online forms:

    • their information is sent directly to us
    • they must print out the employee tax details summary and give it to you
    • don't send the printed form to us
    • input the information into your business systems and they're ready to go.

    If your employee accesses the online forms through a link from your software:

    • their information is sent directly to us
    • your payroll software will request the information from us once the form is submitted.

    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 either:

    • has not completed a TFN declaration
    • isn't required to quote a TFN
    • has chosen not to quote a TFN
    • has provided an invalid TFN.
    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 a payee does not provide a valid TFN or 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 don't 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) and an exemption from quoting a TFN may be claimed.

    Employee is under 18 years old

    The amount you need to withhold from payments to the employee is nil if all of the following 3 conditions are satisfied:

    1. The individual is under 18 years of age.
    2. The individual has not provided you with a TFN declaration (NAT 3092).
    3. The amounts you pay to the individual don't exceed
      • $350 where you pay the individual weekly
      • $700 where you pay the individual fortnightly
      • $1,517 where you pay the individual monthly.
       

    Note: If you are making a single (one off) payment to the employee under 18 years old, apply the monthly threshold.

    Last modified: 16 Sep 2022QC 27062