Document ID: chunk:federal_register_of_legislation:F2018L00775:schedule:1:p2
Version: federal_register_of_legislation:F2018L00775
Segment Type: schedule
Provision Reference: sch 1 (pt 2/4)
Character Range: 7963–10764

levy adjustment ($15 – Step 8) is greater than her Notional amount to be withheld ($0 – Step 7), her varied withholding amount is $15.

Example 2

Scott is 59 years old and receives a weekly superannuation income stream of $1,900, during the 2017-18 financial year.

The tax free component of Scott's weekly superannuation income stream is $175. The taxable component of the superannuation income stream is $1,725. The taxable component is comprised wholly of a taxed element.

Scott will turn 60 on 21 April 2018. His superannuation fund will make 42 payments before his 60th birthday and 10 payments after.

As the taxable component of Scott's income stream is comprised wholly of a taxed element he will not have to pay any tax on this income after his 60th birthday. The amount to be withheld from each payment should be varied. Scott has claimed the tax-free threshold.

Calculate the varied withholding amount

Step 1

Calculate Scott's Assessable income before 60th birthday.

Assessable income before 60th birthday: $1,725 x 42 = $72,450

Step 2

Convert the amount calculated at Step 1 into an Adjusted average payment.

Adjusted average payment: $72,450 / 52 = $1,393.27

Step 3

Calculate Scott's adjusted weekly payment amount.

= $1,393.99 (ignoring cents, adding 0.99)

Step 4

Calculate the withholding on Scott's adjusted weekly payment amount.

Weekly withholding              = $1,393.99 x 0.3450 – 161.9819
          = $318.9447
    = $319 per week (rounded to the nearest dollar)

Step 5

Calculate Scott's Adjusted withholding amount based on the amount calculated at Step 4.

Adjusted withholding          = $319 x 52 / 42
amount         = $394.9524
    = $395 per week (rounded to the nearest dollar)

Step 6

Calculate the per payment Superannuation tax offset that Scott is entitled to, based on the taxable component of his payment.

Superannuation tax offset: $1,725 x 15% = $259 (rounded to the nearest dollar)

Step 7

Calculate the Notional amount to be withheld.

As Scott's Adjusted withholding amount is greater than his superannuation tax offset then the notional amount to be withheld is:

Notional amount to be withheld = $395 (Step 5) - $259 (Step 6) = $136

Step 8

Calculate Scott's Medicare levy adjustment.

As Scott's assessable income before his 60th birthday of $72,450 (Step 1) is greater than $27,067, his Medicare levy adjustment is:

$72,450 x 0.02 / 42 = $35 (rounded to the nearest dollar)

Step 9

Calculate Scott's varied withholding amount.

As Scott's notional amount to be withheld ($136 – Step 7) is greater than his Medicare levy adjustment ($35 – Step 8), his varied withholding amount is $136.

Example 3

Brian is 59 years old and has just commenced receiving weekly superannuation income stream benefits of $1,500. His first payment will