Document ID: chunk:federal_register_of_legislation:F2018L00775:schedule:1:p1
Version: federal_register_of_legislation:F2018L00775
Segment Type: schedule
Provision Reference: sch 1 (pt 1/4)
Character Range: 5421–8186

Schedule 1 -  Statement of formulas for calculating amounts to be withheld 2017/18,  Scale 2 is used in these examples

Example 1

Sally is 59 years old and receives a fortnightly superannuation income stream of $2,140 during the 2017-18 financial year.

The tax free component of Sally's fortnightly superannuation income stream is $440. The taxable component of the superannuation income stream is $1,700, and is comprised wholly of a taxed element.

Sally will turn 60 on 8 January 2018. Her super fund will make 14 payments before she turns 60 and 12 payments after.

As the taxable component of Sally's pension is comprised wholly of a taxed element she will not have to pay any tax on this after she turns 60. Sally's withholding should be varied. Sally has claimed the tax-free threshold and is not entitled to leave loading.

Calculate the varied withholding amount

Step 1

Calculate Sally's Assessable income before 60th birthday.

Assessable income before 60th birthday:  $1,700 x 14 = $23,800

Step 2

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

Adjusted average payment: $23,800 / 26 = $915.38

Step 3

Calculate Sally's adjusted weekly payment amount.

Sally's adjusted weekly amount: $915.38 / 2
          = $457.99 (ignoring cents, adding 0.99)

Step 4

Calculate the withholding on the amount calculated at Step 3.

Weekly withholding   = $457.99 x 0.2900 – 109.1077
          = $23.7094
    = $24 per week (rounded to the nearest dollar)

Fortnightly withholding:  $24 x 2 = $48 per fortnight

Step 5

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

Adjusted withholding  = $48 x 26 / 14
amount   = $89.1428
    = $89 per fortnight (rounded to the nearest dollar)

Step 6

Calculate the per payment Superannuation tax offset Sally is entitled to. This is calculated using the taxable component of her payment.

Superannuation tax offset: $1,700 x 15% = $255 (rounded to the nearest dollar)

Step 7

Calculate the Notional amount to be withheld.

As Sally's Superannuation tax offset ($255 – Step 6) is greater than her Adjusted withholding amount ($89 – Step 5) her Notional amount to be withheld is $0.

Step 8

Calculate Sally's Medicare levy adjustment.

As Sally's assessable income before her 60th birthday of $23,800 (Step 1) is greater than $21,655, her Medicare levy adjustment is:

$23,800 - $21,655 = $2,145

$2,145 x 0.100 / 14 = $15 (rounded to the nearest dollar)

Step 9

Calculate Sally's varied withholding amount.

As Sally's Medicare 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