Medicare levy variation declaration example
Example: Medicare levy adjustment
Jabe's weekly earnings are $1,333.45. Jabe has completed a Tax file number declaration claiming the tax-free threshold. Jabe has also provided a Medicare levy variation declaration with 5 children shown at question 12.
Therefore, scale 2 is applied.
x = 1,333.99
Weekly withholding amount (y)
= (a × x) − b
= (0.3200 × 1,333.99) − 181.7319
= 245.1449 or $245.00 (rounded to nearest dollar)
Levy adjustment: weekly earnings are greater than WFT ($1,325.54) and less than the SOP ($1,656) appropriate to an employee with 5 children. Formula (3) applies.
= (1,325.54 × 0.0200) – ([1,333.99 − 1,325.54] × 0.0800)
= 26.5108 − 0.6760
= 25.8348 or $26.00 (rounded to nearest dollar)
Net weekly withholding amount = $245.00 − $26.00 = $219.00
End of exampleMultiple claims example
Example: Tax offsets and Medicare levy adjustment
Prue's fortnightly earnings are $1,299.30. She resides in zone B and has provided a Tax file number declaration that claims the tax-free threshold and a Withholding declaration that claims zone and tax offsets at the tax offsets questions that totals $1,645. She has also lodged a Medicare levy variation declaration claiming a full exemption from the Medicare levy.
Therefore, scale 5 is applied.
Convert to weekly equivalent = (1,299.30 ÷ 2)
= 649.65 or $649 (ignore cents)
x = 649.99
Weekly withholding amount (y)
= (a × x) − b
= (0.1500 × 649.99) − 54.3462
= 43.1523 or $43.00 (rounded to nearest dollar)
Fortnightly withholding amount
$43.00 × 2 = $86.00
Tax offsets claimed at the tax offsets questions on the Withholding declaration
= 3.8% of $1,645
= 62.5100 or $63.00 (rounded to nearest dollar)
Net fortnightly withholding amount
$86.00 − $63.00 = $23.00
End of exampleTax offsets example
Example: Tax offsets
Tan's monthly earnings are $5,400.33. He has provided a Tax file number declaration claiming the tax-free threshold and claimed a total tax offset of $1,365 at the tax offsets question on the Withholding declaration. He has one child but isn't eligible for a Medicare levy adjustment. The weekly equivalent of his earnings exceeds the Medicare levy SOP of $1,239 appropriate to a payee with one child.
Therefore, scale 2 is applied.
Convert to weekly equivalent = ($5,400.33 + 0.01) × 3 ÷ 13
= 1,246.2323 or $1,246 (ignore cents)
x = 1,246.99
Weekly withholding amount (y)
= (a × x) − b
= (0.3227 × 1,246.99) − 185.1935
= 217.2102 or $217.00 (rounded to nearest dollar)
Monthly withholding amount = $217.00 × 13 ÷ 3 = $940.00 (rounded to nearest dollar)
Tax offset claimed = 8.3% of $1,365 = 113.2950 or $113.00 (rounded to nearest dollar)
Net monthly withholding amount = $940.00 − $113.00 = $827.00
End of example