Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:13:p8
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 13 (pt 8/23)
Character Range: 261961–264604

stream is made up of an annualised tax-free component of $19,500 and annualised taxed element of $150,800 totalling $170,300, which is greater than the defined benefit income cap of $118,750. Withholding applies to 50% of the amount over the cap. Go to step 2.

Step 2: Calculate the fortnightly equivalent of the amount in excess of the cap.

$170,300 − $118,750 = $51,550

$51,550 ÷ 26 = $1,982 (ignoring cents)

Step 3: Divide the amount calculated at step 2 by two.

$1,982 ÷ 2 = $991 (ignoring any cents)

Step 4: Use the Fortnightly tax table at ato.gov.au/taxtables to calculate the withholding amount relevant to the amount worked out in step 3.

As Bill has claimed the tax-free threshold the withholding amount is $44.

Part C

Use this part if the payee is receiving a capped defined benefit income stream and:
    * is 60 years of age or over, and
    * their income stream is only made up of a taxable component – untaxed element.

Withholding steps

Step 1: Use the appropriate PAYG withholding tax table at ato.gov.au/taxtables to calculate the withholding amount relevant to this pay period's taxable component – untaxed element. The tax table you use depends on the period the income stream covers – that is, weekly, fortnightly or monthly.

Note: Some payees may be eligible to claim the seniors and pensioners tax offset (SAPTO). If the payee gives you a Withholding declaration indicating they want to claim a SAPTO entitlement through PAYG withholding, you should use the Schedule 9 - Tax table for seniors and pensioners to work out the amount to withhold from the amount calculated in step 1.

Step 2: Determine the tax offset for the payment.

Convert the untaxed element the payee received this period to an annualised amount. Use the following table to work out the amount of tax offset that applies.
Untaxed element – annualised amount                      Tax offset
Equal to or greater than the defined benefit income cap  Tax offset is capped at 10% of the cap.
Less than the defined benefit income cap                 Tax offset is calculated at 10% of the untaxed element.

Step 3:

If the annualised amount from step 2 is less than the cap, then:

  Tax offset = untaxed element for the payment × 10%

If the annualised amount from step 2 is greater than the cap, then the annual tax offset is capped at 10% of the cap. Therefore, the tax offset for the payment is reduced to the weekly, fortnightly or monthly equivalent of the capped tax offset amount.

Step 4: Work out the amount to withhold by subtracting the tax offset per payment (step 3) from the withholding amount (step 1).

  Amount to withhold