Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:3:p4
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 3 (pt 4/5)
Character Range: 93866–96572

given you their TFN within 28 days, you must withhold 47% from any payment you make to a resident employee and 45% from a foreign resident employee (ignoring any cents) unless we tell you not to.

Do not allow for any tax offsets or Medicare levy adjustment. Do not withhold any amount for study and training support loans.

When your employee is a foreign resident

If your employee has answered that they are a foreign resident for tax purposes on their Tax file number declaration, you will need to use the foreign resident tax rates.

There are two ways you can withhold from a foreign resident's earnings:
    * if they have not given you a valid TFN, you need to withhold 45% for each $1 of earnings (ignoring any cents)
    * if they have given you a valid TFN, you need to withhold the amount calculated using the foreign resident tax rates, rounding any cents to the nearest dollar.

Foreign resident tax rates

Weekly tax rates
Weekly earnings  Weekly rate
  $
0 to 2,595       30 cents for each dollar of earnings
2,596 to 3,652   $779 plus 37 cents for each $1 of
                   earnings over $2,595
3,653 & over     $1,170 plus 45 cents for each $1 of
                   earnings over $3,652

Foreign residents cannot claim tax offsets to reduce withholding. If your foreign resident employee has claimed a tax offset on the Withholding declaration, don't make any adjustments to the amount you withhold.

Withholding declarations

Employees can use a Withholding declaration to advise you of any changes to their situation that may affect the amount you need to withhold from their payments.

Changes that may affect the amount you need to withhold include:
    * becoming or ceasing to be an Australian resident for tax purposes
    * claiming or discontinuing a claim for the tax-free threshold

    * advising of a HELP, VSL, FS, SSL or AASL debt, or changes to them.

An employee may also use a Withholding declaration to advise you of a tax offset they choose to claim through reduced withholding from you. For more information, see the section in this schedule on 'Claiming tax offsets'.

When your employee provides you with a Withholding declaration it will take effect from the next payment you make. If you receive an updated declaration from an employee, it will replace the previous one.

An employee must have provided you with a valid Tax file number declaration before they can provide you with a Withholding declaration.

Claiming tax offsets

If your employee chooses to claim their entitlement to a tax offset through reduced withholding, they must provide you with a Withholding declaration.

If your employee claims a tax offset, reduce the amount to be withheld