Search Suggestion:

# General examples

Last updated 12 October 2020

Example 1

Employee's weekly earnings are \$1,103.45. Employee has completed a Tax file number declaration claiming the tax-free threshold. The employee has also provided a Medicare levy variation declaration with five children shown at question 12.

Therefore, scale 2 is applied.

x = 1,103.99

Weekly withholding amount (y)

= (a × x) − b

= (0.3477 × 1,103.99) − 186.2119

= 197.6454 or \$198.00 (rounded to nearest dollar)

Levy adjustment: weekly earnings are greater than WFT (\$1,079.60) and less than the SOP (\$1,349) appropriate to an employee with five children. Formula (3) applies.

= (1,079.60 × 0.0200) – ([1,103.99 − 1,079.60] × 0.0800)

= 21.5920 − 1.9512

= 19.6408 or \$20.00 (rounded to nearest dollar)

Net weekly withholding amount

\$198.00 − \$20.00 = \$178.00

Example 2

Employee's fortnightly earnings are \$1,110.30. Employee resides in zone B, 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. The employee 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

= (1,110.30 ÷ 2)

= 555.15 or \$555 (ignore cents)

x = 555.99

Weekly withholding amount (y)

= (a × x) − b

= (0.1900 × 555.99) − 68.3462

= 37.2919 or \$37.00 (rounded to nearest dollar)

Fortnightly withholding amount

\$37.00 × 2 = \$74.00

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

\$74.00 − \$63.00 = \$11.00.

Example 3

Employee's monthly earnings are \$4,500.33. Employee 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. The employee has one child but is not eligible for a Medicare levy adjustment. The weekly equivalent of the employee’s earnings exceeds the Medicare levy SOP of \$1,009 appropriate to an employee with one child.

Therefore, scale 2 is applied.

Convert to weekly equivalent

= (\$4,500.33 + 0.01) × 3 ÷ 13

= 1,038.5400 or \$1,038 (ignore cents)

x = 1,038.99

Weekly withholding amount (y)

= (a × x) − b

= (0.3477 × 1,038.99) − 186.2119

= 175.0449 or \$175.00 (rounded to nearest dollar)

Monthly withholding amount

\$175.00 × 13 ÷ 3 = \$758.33 or \$758.00 (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

\$758.00 − \$113.00 = \$645.00

End of example

QC63798