Tax file number and withholding declarations

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.

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

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

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, Australian Apprenticeship Support Loan (previously known as 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 accesses the form directly, their information is sent electronically to us. They must print out the employee tax details summary and give it to you. Don't ask your employee to send the summary to you via email. Sending personal information via email, which is not a secure channel, increases exposure to fraud.

You must:

• input the information into your business systems
• not send the printed form to us.

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

• their information is sent electronically 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 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 applied for a TFN, 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

Use one of the following code numbers instead of the TFN when a payee either:

• hasn't 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	The payee has: not provided a TFN fails to provide a TFN within 14 days.
111111111	The payee hasn't provided a valid TFN given you a declaration that 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	The payee is both: under 18 years old claiming the general exemption because they won't earn more than the tax-free threshold. If circumstances change and the payee's earnings will exceed the tax-free threshold, they will need to provide a TFN.
444444444	The payee is both: receiving a social security or service pension or benefit (other than Newstart, sickness allowance, special benefits or partner allowance) claiming an exemption from quoting a TFN.

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 hasn't provided you with a TFN declaration.
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.