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  • How to use the tax withheld for individuals calculator

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    Payments

    You should use this calculator if you make any of the following payments on a weekly, fortnightly or monthly basis:

    • salary, wages, allowances and leave loading to employees
    • paid parental leave to an eligible worker director’s fees
    • salary and allowances to office holders (including members of parliament, statutory office holders, defence force members and police officers)
    • payments to labour hire workers
    • payments to religious practitioners
    • government education or training payments
    • compensation, sickness or accident payments that are calculated at a periodical rate and made because a person is unable to work (unless the payment is made under an insurance policy to the policy owner).

    Also use this calculator for payments made to both:

    • foreign residents
    • working holiday makers.

    You are unable to use the tax withheld calculator if you make payments to:

    • shearers
    • workers in the horticultural industry
    • performing artists
    • those engaged on a daily or casual basis.

    Other tax tables apply for these workers.

    Payee name

    The payee name field is optional, but you may find it useful if you want to print the result.

    You can find the answers to the questions in this section of the tax withheld calculator from the payee section of your payee's:

    • Tax file number declaration
    • Withholding declaration.

    Medicare levy variation

    You can find the answers to the Medicare levy questions in the payee's Medicare levy variation declaration. If the payee has not completed a Medicare levy variation declaration, you can ignore the Medicare levy questions.

    Miscellaneous

    Study and training support loans

    If your payee has a Higher Education Loan Program (HELP), VET Student Loan (VSL), Financial Supplement (FS), Student Start-up Loan (SSL) – includes ABSTUDY SSL or Trade Support Loan (TSL) debt, you may need to withhold additional amounts from their payments. Your payee will need to notify you of this on their Tax file number declaration or Withholding declaration. The tax withheld calculator will include any additional amounts for study and training support loans in the withholding amount if they apply.

    Displaying the results

    Select the appropriate period of payment (weekly, fortnightly or monthly) then complete all questions, and select the Calculate button. The calculator will then display:

    • your payee's gross pay
    • the amount you must withhold
    • your payee's net pay.

    When there are 53 pays in a financial year

    In some years, you may have 53 pays instead of the usual 52. As this table is based on 52 pays, the extra pay may result in insufficient amounts being withheld. You should let your employees know when this occurs so if they are concerned about a shortfall, they can ask you to withhold the additional amount in the table below.

    Extra withholding amount

    Weekly earnings $

    Additional withholding $

    875 to 2,299

    3

    2,300 to 3,449

    5

    3,450 and over

    10

    When there are 27 pays in a financial year

    In some years, you may have 27 pays instead of the usual 26. As this table is based on 26 pays, the extra pay may result in insufficient amounts being withheld. You should let your employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amount in the table below.

    Extra withholding amount

    Fortnightly earnings $

    Additional withholding $

    1,750 to 4,549

    13

    4,550 to 6,749

    21

    6,750 and over

    40

    Leave loading

    If you pay leave loading as a lump sum, you need to use Tax table for back payments, commissions, bonuses and similar payments to calculate withholding.

    If you pay leave loading on a pro rata basis, then add the leave loading payment to earnings for the period to calculate withholding.

    Death of an employee

    Payments of salary, wages, commissions, bonuses or allowances made after the death of an employee are not subject to withholding. Even if the income was earned before the death of the payee, you are not required to withhold an amount.

    Salary Sacrifice

    A salary sacrifice arrangement is also commonly referred to as salary packaging or total remuneration packaging.

    Terms we use

    The following is a list of terms we use in the calculators and their meanings.

    Australian resident

    You must apply foreign resident withholding rates where a payee has declared they are not an Australian resident on their:

    Select 'Non-Resident' at the What is the tax status of the payee? question on the calculator if this applies to your payee.

    To work out whether the payee is an Australian resident for tax purposes, refer to Your tax residency.

    Commissioner's instalment rate

    The rate of withholding is either the payee's Commissioner's instalment rate or a flat rate of 20%.

    If your payee:

    • has a Commissioner's instalment rate of more than 20%, you must withhold at their Commissioner's instalment rate
    • has a Commissioner's instalment rate of 20% or less, you must withhold at the flat rate of 20% unless you and your payee agree to use the Commissioner's instalment rate
    • doesn't know their Commissioner's instalment rate at the time of the agreement, you must withhold at the flat rate of 20%.

    It is your payee's responsibility to tell you their Commissioner's instalment rate in their voluntary agreement.

    We can provide forms or you can develop your own voluntary agreement, providing it contains the required information of a voluntary agreement.

    Gross earnings

    Gross earnings include:

    • your payees normal earnings
    • any allowances and irregular payments you will add.

    Enter the total amount at the Payee's gross earnings question on the calculator. Do not include cents, unless the payment is a monthly amount.

    Study and training support loan debt repayments

    Payees who have deferred a HELP, VSL, FS, SSL or TSL debt will repay their loan/s through the tax system once they earn above the minimum repayment threshold for the relevant year.

    Payees make compulsory repayments of HELP, VSL, FS, SSL or TSL debts through the tax system when their repayment income is above the minimum repayment threshold. The amount they repay increases as their income increases.

    You may need to withhold extra amounts for your payees with a Study and training support loans debt under the pay as you go (PAYG) withholding system. The extra amounts cover any compulsory repayment that may be included on their notice of assessment.

    The Tax file number declaration and Withholding declaration include the following question:

    • Do you have a Higher Education Loan Program (HELP), VET Student Loan (VSL), Financial Supplement (FS), Student Start-up Loan (SSL) or Trade Support Loan (TSL) debt?

    If they have answered yes to this question, then you should answer yes to the equivalent question on the calculator:

    • Does the payee have a Study and Training Support Loan debt?

    Medicare levy variation

    Prescribed persons may claim an exemption from, or variation to, the Medicare levy.

    Prescribed persons include:

    • repatriation and Centrelink pension or benefits recipients
    • members of the Australian Defence Force (ADF).

    To claim the Medicare levy variation available to some low-income earners with dependants, your payee must lodge a Medicare levy variation declaration along with their Withholding declaration.

    If your payee has lodged both forms, you must complete the Medicare Levy questions on the calculator. Enter the number of children your payee has claimed. For payees claiming a spouse only, enter 0 (zero).

    Seniors and pensioners tax offset

    You can't use the tax withheld calculator for the seniors and pensioners tax offset tax rate calculation. To find out more information, see Tax table for seniors and pensioners.

    Tax file number not provided

    If your payee has not given you a valid Tax file number declaration quoting their tax file number (TFN) or one of the exemptions below (see TFN exempt), you must withhold 47% for a resident employee and 45% for a foreign resident employee from the total gross payment, including:

    • the whole amount of all leave loading payments
    • payments on termination of employment – that is, holiday pay, unused annual leave and long service leave
    • the taxable part of an employment termination payment.

    TFN exempt

    Your payee is exempt from quoting a TFN if any of the following apply:

    • They are under 18 years of age and earn less than $18,200 per year.
    • They are an applicant or recipient of certain pensions, benefits or allowances from the:      
      • Services Australia - however, they will need to quote their TFN if they receive Newstart, Youth or sickness allowance, or an Austudy, Jobseeker or parenting payment
      • Department of Veterans' Affairs - a service pension under the Veterans' Entitlement Act 1986
      • Military Rehabilitation and Compensation Commission
       
    • They have told you they lodged a TFN application or enquiry with us less than 28 days ago.
    • They have an interim notice we issued which is still in force.

    Tax-free threshold claimed

    If your payee is an Australian resident for tax purposes, $18,200 of their yearly income is not taxed. This is called the tax-free threshold.

    If your payee is certain their total annual income from all payers will be less than $18,200 they can claim the tax-free threshold from each payer. Foreign residents can't claim the tax-free threshold.

    If your payee has claimed the tax-free threshold on the TFN declaration, you will need to select 'yes' at the Has the payee claimed the Tax Free Threshold? question on the calculator.

    To find our more information, see Income from more than one job.

    Tax offsets

    Tax offsets reduce tax payable and are spread over the whole year in weekly instalments.

    If your payee is entitled to a tax offset, you withhold less from their pay. Your payee can claim tax offsets only if they are also claiming the tax-free threshold.

    If your payee chooses to claim their entitlement to a tax offset through reduced withholding, they must provide you with a Withholding declaration. Enter the amount your payee shows at the tax offsets question on the Withholding declaration at the Tax offsets question on the calculator.

    Working holiday maker

    The withholding rates that apply to a payee with a relevant working holiday maker visa will depend on whether you are a registered employer.

    • If you have registered as an employer of working holiday makers, you should apply the Working holiday maker withholding rates of 15% to the first $45,000 of income earned. Income in excess of $45,000 should be withheld at foreign resident withholding rates.
    • If you have not registered, you must apply foreign resident withholding rates from the first dollar of income earned.

    To find out more information, see the Tax table for working holiday makers.

    Last modified: 01 Jul 2022QC 16944