Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:6:p2
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 6 (pt 2/3)
Character Range: 156239–158863

are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Examples

These examples use the PAYG withholding tax tables at ato.gov.au/taxtables that apply from 1 July 2024.
Example 1:
Barbara has an annuity she purchased following the sale of a property. She receives annuity payments of $1,000 a week. The deductible amount for the 2024–25 income year is $5,200.
    1. The amount of income to withhold tax from:
         Annuity payment − [Deductible amount / Number of instalments]
         = $1,000 − [$5,200 / 52]
         = $1,000 − $100
         = $900
    2. Barbara is not eligible for SAPTO, so the payer will use the Weekly tax table to work out how much tax to withhold from $900. If Barbara is claiming the tax-free threshold, the amount of tax to be withheld is $111.

Example 2:

Kenneth will receive fortnightly annuity payments on the 7th and 21st day of the month from 7 February 2025. For the remainder of the income year, the annuity will be $850 per fortnight. The annuity is indexed annually, and the higher indexed amount is paid in the next financial year.

Kenneth's deductible amount for a whole income year is $2,600. However, for the part of the current income year (2024–25) that he is to receive an annuity, his deductible amount is $1,000 (for the period 7 February 2025 to 30 June 2025).

For the current income year, Kenneth will receive ten annuity instalments.
    1. The amount of income to withhold tax from:
         Annuity payment − [Deductible amount / Number of instalments]
         = $850 − [$1,000 / 10]
         = $850 − $100
         = $750
    2. Kenneth is not eligible for SAPTO, so the payer will then use the Fortnightly tax table to work out how much tax to withhold from $750. If Kenneth is claiming the tax-free threshold, the amount of tax to be withheld is $4.

Tax file number (TFN) declarations

The answers your payees provide on their Tax file number declaration determine the amount you need to withhold from their payments. A Tax file number declaration applies to any payments made after you receive the declaration. If you receive an updated declaration from a payee, it will override the previous one.

If a payee does not give you a valid Tax file number declaration within 14 days of starting a payer-payee relationship, you must complete a Tax file number declaration with all available details of the payee and send it to us.

When a TFN has not been provided

You must withhold 47% from any payment you make to a resident payee and 45% from any payment you make to a foreign