Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:13:p14
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 13 (pt 14/23)
Character Range: 276296–278927

(number of days ÷ 365 × 100)
Step 3  Multiply the general defined benefit income cap ($118,750) by step 2. The result is the payee's reduced defined benefit income cap.
Step 4  Work out the withholding amount using the reduced defined benefit income cap. Refer to the examples for guidance.

These examples use the PAYG withholding tax tables that apply from 1 July 2024.
Examples: Case E (i): Turning 60 during the financial year

On 1 July 2024 Loraine was 59 years of age receiving a capped defined benefit income stream for the full year. Loraine turns 60 on 12 September 2024. Loraine's income stream paid to her prior to turning 60 will be taxed according to part A.

The character of this income changes when Loraine turns 60, therefore she will be subject to a different tax treatment on the income she receives after she turns 60.

To calculate withholding on any payment made on or after Loraine's birthday, apply the steps outlined in this example.

Loraine receives a fortnightly income stream of $5,200 for the full year, made up of the following:

    * a tax-free component of $400
    * a taxable component – taxed element of $4,800.

A. Work out Loraine's reduced defined benefit income cap for the 2024-25 financial year as follows:

    * Step 1: Number of days from Loraine's birthday to 30 June 2025 is 292
    * Step 2: Step 1 result expressed as a percentage of the year: 292 ÷ 365 = 80%
    * Step 3: Multiply the general defined benefit cap by step 2 result: $118,750 × 80%

Loraine's reduced defined benefit income cap is $95,000.

B. Annualise the components that make up Loraine's super income stream:

    * a fortnightly tax-free component of $400. Annualised amount $10,400 ($400 × 26)
    * a taxable component - taxed element of $4,800. Annualised amount $124,800 ($4,800 × 26)

C. Add the annualised amounts of each component $10,400 + $124,800 = $135,200

D. Work out the amount of income Loraine earned after she turned 60.

Multiply the annual equivalent (step C) of Loraine's fortnightly super income stream by the percentage worked out at step 2. $135,200 × 80% = $108,160

E. Work out the remaining fortnights in the financial year from when Loraine turned 60 that withholding applies: 292 days ÷ 14 days = 20

F. Work out the withholding rate as follows:

(i) Calculate the fortnightly equivalent of the amount in excess of her reduced cap of $95,000.

$108,160 − $95,000 = $13,160

Loraine is paid fortnightly, therefore:

$13,160 ÷ 20 (remaining fortnights) = $658 (ignoring cents)

(ii) Divide the amount calculated at (i) by two.

$658 ÷ 2 = $329 (rounded to the nearest dollar)

(iii)