Document ID: chunk:federal_register_of_legislation:F2024L00664:clause:1_865:p2
Version: federal_register_of_legislation:F2024L00664
Segment Type: clause
Provision Reference: sch 1 cl 865 (pt 2/8)
Character Range: 14254–17145

withholding amounts before any tax offsets and Medicare levy adjustments are allowed. For instructions on the treatment of tax offsets and Medicare levy adjustments, refer to the sections on 'Tax offsets' and 'Medicare levy adjustment' in this schedule.

Sample data to verify that the software program is calculating the correct withholding amounts and Medicare levy adjustments has been provided in this schedule.

Withholding amounts calculated using these formulas may vary slightly to those calculated using the method set out in the footnote to the appropriate PAYG withholding tax table at ato.gov.au/taxtables. This applies if earnings exceed $3,400 weekly or $6,800 fortnightly.

Rounding of withholding amounts

Withholding amounts calculated as a result of applying the above formulas are rounded to the nearest dollar. Values ending in 50 cents are rounded to the next higher dollar. Do this rounding directly – that is, do not make a preliminary rounding to the nearest cent.

Use these rounding rules across all scales except scale 4 (where employee does not provide a TFN). For scale 4, cents are ignored when applying the tax rate to earnings and when withholding amounts are calculated.

When there are 53 pays in a financial year

In some years, you may have 53 pays instead of the usual 52. As this schedule is based on 52 pays, the extra pay may result in insufficient amounts being withheld. You should let your employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amount in the table below.
Extra withholding amount, 53 pays
Weekly earnings  Additional withholding
  $                $
875 to 2,574     3
2,575 to 3,649   6
3,650 & over     12

When there are 27 pays in a financial year

In some years, you may have 27 pays instead of the usual 26. As this schedule is based on 26 pays, the extra pay may result in insufficient amounts being withheld. You should let employees know when this occurs so if they are concerned about a shortfall in tax withheld, they can ask you to withhold the additional amounts in the table below.
Extra withholding amount, 27 pays
Fortnightly earnings  Additional withholding
  $                     $
1,750 to 5,149        12
5,150 to 7,249        26
7,250 & over          47

Working out the weekly earnings

The method of working out the weekly earnings (x) for the purpose of applying the formulas is as follows:
Example
Weekly income                         $467.59
Add allowance subject to withholding  $9.50
Total earnings (ignore cents)         $477.00
Add 99 cents                          $0.99
Weekly earnings                       $477.99

Calculating withholding fortnightly, monthly or quarterly amounts

First calculate the weekly equivalent of fortnightly, monthly or quarterly earnings. If you pay:
    * fortnightly – divide the