Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:13:p12
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 13 (pt 12/23)
Character Range: 271670–274242

from the result.

Sum of tax-free component and taxed element.

$10,000 + $92,000 = $102,000

Amount in excess of cap.

$102,000 − $118,750 = −$16,750

As $102,000 is less than $118,750 there is no excess amount.

Step 3 and Step 4: These steps are not necessary as no excess amount was calculated at step 2.

Step 5: Add the untaxed element of the taxable component $1,269 (ie. fortnightly equivalent of $33,000) to the amount calculated at step 4 (Nil).

$1,269 + Nil = $1,269

Step 6: Using the Fortnightly tax table at ato.gov.au/taxtables the withholding amount relevant to the amount calculated in step 5 is $112.

Calculate the tax offset applicable

Step 7: As Fred's tax-free component and taxed element is less than the $118,750 cap, he is entitled to a tax offset limited to the amount up to the cap.

Tax offset = ($118,750 − amount at step 2) × 10%

($118,750 − $102,000) × 10% = $1,675

The tax offset amount is capped at $1,675.

As Fred is being paid on a fortnightly basis divide the offset by 26.

$1,675 ÷ 26 = $64 (ignore any cents).

Work out the amount to withhold

Step 8: Amount to withhold = withholding amount (step 6) − tax offset (step 7)

= $112 − $64

Total amount to withhold is $48.

Example: Case D (iii) - Payee is over 60 years old and receives some elements of a capped defined benefit income stream

Bob, 70, receives a capped defined benefit income stream (annualised) for the full financial year of $210,000 comprising of:

    * taxable component – taxed element $0
    * taxable component – untaxed element $180,000
    * tax-free component $30,000.

Bob is paid weekly and claims the tax-free threshold.

Work out the amount subject to withholding

Step 1: Add together all the components.

$0 + $180,000 + $30,000 = $210,000

As the sum is over the $118,750 cap, proceed to step 2.

Step 2: Add together the tax-free component and taxed element. Subtract the $118,750 cap from this amount.

$30,000 + $0 = $30,000

$30,000 − $118,750 = −$88,750

As $30,000 is less than the $118,750 cap, there is no excess amount.

Step 3 and Step 4: These steps are not necessary as no excess amount was calculated at step 2.

Step 5: Add the untaxed element of the taxable component $3,461 (that is, weekly equivalent of $180,000) to the amount calculated at step 4 (Nil).

$3,461 + Nil = $3,461

Step 6: Using the Weekly tax table at ato.gov.au/taxtables the withholding amount relevant to the amount calculated in step 5 is $992.

Calculate the tax offset applicable

Step 7: As Bob's tax-free component is less than the $118,750 cap, then