Document ID: chunk:federal_register_of_legislation:F2024L00664:schedule:5:p1
Version: federal_register_of_legislation:F2024L00664
Segment Type: schedule
Provision Reference: sch 5 (pt 1/4)
Character Range: 99827–102506

Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments

This schedule applies to certain withholding payments covered by Subdivisions 12-B (except sections 12-50 and 12-55), 12-C (except sections 12-85 and 12-90) and 12-D of Schedule 1 to the TAA paid as a lump sum.

The amounts, formulas and procedures in this schedule were last updated on 1 July 2024.

Using this schedule

Use this schedule if you make a payment of salary or wages which is:
    * a back payment (including lump sum payments in arrears)
    * a commission
    * a bonus or similar payment.

If you employ individuals under a working holiday makers visa you must use Schedule 15 - Tax table for working holiday makers for all payments made to them, including back payments, commissions and bonuses or similar payments.

Other payments you should use this schedule for

These payments include back payments of:
    * compensation or sickness or accident payments for an incapacity for work that are not tax exempt
    * Australian Government education or training payments – for example, Austudy or ABSTUDY
    * assessable pensions, benefits and allowances under the Social Security Act 1991 or the Veterans' Entitlements Act 1986, or similar payments made under a law of a foreign country, state or province.

Back payments (including lump sums in arrears)

A back payment is a payment that was meant to have been made in a prior period. For example:
    * your employee's wages were underpaid due to an error or oversight
    * an allowance you were due to pay in July was overlooked and you made the payment in December.

A back payment is distinct from a bonus, which is a payment made for recognition of performance including past performance. A bonus (or similar payment) can only be considered a back payment if you paid the bonus later than the time that it should have been paid.

If you normally process payments in a pay period later than when the work is performed – for example, overtime payments paid with a time lag of one pay period – they are not considered back payments. These payments are treated as part of the normal pay cycle when paid and withholding is calculated on total earnings for that period. An overtime payment is only considered a back payment if it was meant to have been made in a prior pay period.

Commissions

Commissions are typically payments made as recognition of performance or service and may be calculated as a percentage of the proceeds from a particular transaction or series of transactions.

Bonuses and similar payments

A bonus is usually made to an employee in recognition of performance or services and may be calculated