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Calculation statement and the amount for labels T5 and S

Last updated 17 January 2023

Calculation statement

About the calculation statement and calculating the amounts for labels T5 tax payable and S amount due or refundable.

About the calculation statement

This statement works out the tax liability (if any) where there is a taxable or net income. It also takes into account amounts that reduce the tax liability. The final outcome is the net amount the company must pay or we will refund.

We use the information you provide in the Calculation statement to calculate the Commissioner’s instalment rate and the Commissioner’s instalment amount for taxpayers under the PAYG instalment system.

Complete the Calculation statement as accurately as possible, so the rate and instalment amounts we calculate result in a reliable estimate of your tax payable.

To work through the Calculation statement on the tax return, begin with the right-hand column at the top.

ABT1T5I and S of the Calculation statement are mandatory for legal or ATO purposes. Complete these to facilitate smooth processing of the tax return.

Calculating your T5 Tax payable and S Amount due or refundable

Step 1: Write the following amounts.

  • If the amount is a positive at T Taxable/net income or loss item 7 then write the amount at A Taxable or net income.              
    • If the amount is a loss at T item 7 then write zero at A.
    • Include an amount at A even if it is zero (if zero write 0).
    • Complete A, as it is mandatory.
  • Write the totals for the following (CD, E and F have details within these Company tax return instructions to help you work out your totals)                
    • C Non-refundable non-carry forward tax offsets
    • D Non-refundable carry forward tax offsets
    • E Refundable tax offsets
    • F Franking deficit tax offset
    • H7 Other credits (excluding credits for foreign resident capital gains withholding).
  • From your records, transfer the respective amounts to              
    • M R&D recoupment tax
    • G Section 102AAM interest charge
    • H1 Credit for interest on early payments – amount of interest
    • H2 Credit for tax withheld – foreign resident withholding (excluding credits for foreign resident capital gains withholding)
    • H3 Credit for tax withheld where ABN is not quoted
    • H4 Tax withheld from interest or investments
    • H5 Credit for TFN amounts withheld from payments from closely held trusts
    • H8 Credit for foreign resident capital gains withholding amounts
    • K PAYG instalments raised.
  • For retirement savings accounts (RSA) providers only              
    • write at U in item 19 the amount of no-TFN contributions income; if zero write 0
    • write at X in item 19 the amount of tax payable on no-TFN contributions income; if zero, write 0.

Step 2: Work out the amount at T1 by referring to Appendix 7 for the tax rates.

If any tax is payable (a positive amount) on the amount at A, write this tax payable amount at T1.          

  • Include an amount at T1 even if it is zero (if zero write 0).
  • Complete T1, as it is mandatory.

Step 3: Work out the amount at B Gross Tax (for more information, see the label instructions).

  • Add T1 and M.
  • For RSAs, add T1M and the amount at X Income tax payable on no-TFN contributions income item 19.
  • Write the result at B.

Step 4: Work out the amount at T2 Subtotal 1 (for more information, see the label instructions and examples).

  • If the amount at C is less than the amount at B Gross tax              
    • take C away from B
    • write the result at T2
    • go to step 5.
  • If the amount at C is more than or equal to the amount at B Gross Tax                
    • Write zero at each of T2T3 Subtotal 2, T4 Subtotal 3 and T5 Tax Payable                
      • include an amount at T5 even if it is zero (if zero write 0)
      • complete T5, as it is mandatory
    • the amount at D and F may be carried forward to a later income year (subject to the tax offset carry forward rules in Division 65 of the ITAA 1997)
    • copy the amount at E to I Tax offset refunds (Remainder of refundable tax offsets)               
      • an amount must be included at I even if it is zero (if zero write 0)
      • complete I as it is mandatory
    • go to step 8.

Step 5: Work out the amount at T3 (for more information, see the label instructions and examples).

  • If the amount at D is less than the amount at T2              
    • take D away from T2
    • write the result at T3
    • go to step 6.
  • If the amount at D is more than or equal to the amount at T2                
    • Write zero at T3T4 and T5
    • the difference between T2 and D (take T2 away from D) may be carried forward to a later income year (subject to the tax offset carry forward rules in Division 65 of the ITAA 1997)
    • the amount at F may be carried forward to a later income year
    • copy the amount at E to I
    • go to step 8.

Step 6: Work out the amount at T4 (for more information, see the label instructions and examples).

  • If the amount at E is less than the amount at T3                
    • take E away from T3
    • write the result at T4
    • write zero at I
    • go to step 7.
  • If the amount at E is more than or equal to the amount at T3                
    • take T3 away from E and write the result at I
    • write zero at T4 and at T5
    • the amount at F may be carried forward to a later income year
    • go to step 8.

Step 7: Work out the amount at T5 (for more information, see the label instructions and examples).

  • If the amount at F is less than the amount at T4                
    • take F away from T4
    • write the result at T5
    • go to step 8.
  • If the amount at F is more than or equal to the amount at T4                
    • write zero at T5
    • the result of taking T4 away from F, may be carried forward to a later income year
    • go to step 8.

Step 8: Work out the amount at H:

  • add from H1 to H8 and write the result at H
  • go to step 9.

Step 9: Work out the amount at S Amount due or refundable:

  • add T5 and G, and then take away HI and K
  • write the result at S
  • if the amount at S is positive, that amount is payable by you.
  • if the amount at S is negative, that amount is refundable to you.

Continue to: Calculation statement labels A, T1, M and B

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