# Statement of formulas for calculating amounts to be withheld

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5 Weekly family (WFT) Where scale or scale 6 is applied Where an employee has answered yes to question 9 and no to question on the Medicare levy variation declaration: WFT = \$ (,67 ) (rounded to the nearest cent). Where an employee has answered yes to question on the Medicare levy variation declaration, you need to: (a) multiply the number of shown at question by,6 and add the result to,67 (b) divide the result of (a) by (c) round the result of (b) to the nearest cent. Example If the employee has shown two dependent at question : WFT = ([,6 ] +,67) WFT = or \$78.9 (rounded to the nearest cent) Shading Out Point (SOP) The SOP relative to an employee s WFT is calculated as follows: Multiply WFT by 0. and divide the result by Ignore any cents in the result. Example Employee has shown six dependent at question and scale is applied: WFT = ([,6 6] +,67) WFT =,0.077 or \$,0.06 (rounded to the nearest cent) SOP = (WFT 0.) SOP = (\$, ) SOP =,8.0 or \$,8 (ignoring cents) Weekly Levy Adjustment (WLA) Where scale 6 is applied Where weekly are \$660 or more but less than the SOP, the WLA is derived by applying the weekly (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly on page ), in the following formulas: If x is less than \$86, WLA = (x ) 0.0 If x is \$86 or more but less than WFT, WLA = x If x is equal to or greater than WFT and less than the SOP, WLA = (WFT 0.000) ([x WFT] 0.000) In each case WLA is rounded to the nearest dollar. Values ending in 0 cents are rounded to the next higher dollar. Examples Employee s weekly are \$0. and scale is applied. x = 0.99 As x is less than \$9, WLA is calculated using formula (): WLA = ( ) 0. =.090 or \$.00 (rounded to the nearest dollar). Employee s weekly are \$8.7 and the number of claimed at question is three. is applied. x = 8.99 WFT = ([,6 ] +,67) = or \$8.98 (rounded to the nearest cent) As x is greater than \$86 and less than WFT, WLA is calculated using formula (): WLA = = 8.99 or \$8.00 (rounded to the nearest dollar). Employee s weekly are \$98.9 and the number of claimed at question is four. Scale is applied. x = WFT = ([,6 ] +,67) = or \$90.67 (rounded to the nearest cent). SOP = ( ) 0.08 =,9.87 or \$,9 (ignoring cents). As x is greater than WFT and less than SOP, WLA is calculated using formula (): WLA = ( ) ([ ] ) =.778 or \$.00 (rounded to the nearest dollar) Where scale is applied Where weekly are \$9 or more but less than the SOP, the WLA is derived by applying the weekly (x) expressed in whole dollars plus an amount of 99 cents (refer to Working out the weekly on page ), in the following formulas: If x is less than \$9, WLA = (x 9.0) 0. If x is \$9 or more but less than WFT, WLA = x If x is equal to or greater than WFT and less than the SOP, WLA = (WFT 0.000) ([x WFT] ) Schedule Statement of formulas for calculating amounts to be withheld

6 Fortnightly levy adjustment Multiply rounded weekly levy adjustment by two. Quarterly levy adjustment Multiply rounded weekly levy adjustment by. Example Employee s fortnightly are \$,9. and the number of claimed at question is one. Scale is applied. Equivalent weekly = \$,9. = \$77.76 x = WFT = ([,6 ] +,67) = 7.96 or \$7.60 (rounded to the nearest cent). SOP = ( ) 0.08 = or \$90 (ignoring cents). As x is greater than WFT and less than SOP, formula () is used: WLA = ( ) ([ ] ) =.08 or \$.00 (rounded to the nearest dollar). The fortnightly levy adjustment is therefore \$.00 (\$.00 x ) Monthly levy adjustment Multiply rounded weekly levy adjustment by and divide the result by three. The result should be rounded to the nearest dollar. Example Employee s monthly are \$,800. and has a spouse but no. Scale is applied. Equivalent weekly = (\$, ) = \$66. x = WFT = \$ As x is greater than \$9 and less than WFT, formula () applies: WLA = =.998 or \$.00 (rounded to the nearest dollar). The monthly adjustment is therefore \$6.00 (\$.00, rounded to the nearest dollar). General examples Employee s weekly are \$97.. Employee has completed a Tax file number declaration claiming the tax-free. The employee has also provided a Medicare levy variation declaration with five shown at question. Therefore, scale is applied. x = Weekly withholding amount (y) = (a x) b = ( ) 6. = or \$7.00 (rounded to the nearest dollar) Levy adjustment: weekly are greater than WFT (\$96.7) and less than the SOP (\$,0) appropriate to employee with five. Formula () applies. = ( ) ([ ] ) = = 8.78 or \$8.00 (rounded to the nearest dollar) Net weekly withholding amount \$7.00 \$8.00 = \$6.00 Employee s fortnightly are \$,0.0. Employee resides in zone B, has provided a Tax file number declaration that claims the tax-free and a Withholding declaration that claims zone and tax offsets at the tax offsets questions that totals \$,6. The employee has also lodged a Medicare levy variation declaration claiming a full from the Medicare levy. Therefore, scale is applied. Convert to weekly equivalent = (,0.0 ) =. or \$ (ignore cents) x =.99 Weekly withholding amount (y) = (a x) b = ( ) 67.6 = 8.76 or \$8.00 (rounded to the nearest dollar) Fortnightly withholding amount \$8.00 = \$76.00 Tax offsets claimed at the tax offsets questions on the Withholding declaration =.8% of \$,6 = 6.00 or \$6.00 (rounded to the nearest dollar) Net fortnightly withholding amount \$76.00 \$6.00 = \$ Schedule Statement of formulas for calculating amounts to be withheld

7 Employee s monthly are \$,90.. Employee has provided a Tax file number declaration claiming the tax-free and claimed a total tax offset of \$,6 at the tax offsets question on the Withholding declaration. The employee has one but is not eligible for a Medicare levy adjustment. The weekly equivalent of the employee s exceeds the Medicare levy SOP of \$90 appropriate to an employee with one. Therefore, scale is applied. Convert to weekly equivalent = (\$, ) = or \$909 (ignore cents) x = Weekly withholding amount (y) = (a x) b = ( ) 6. = or \$.00 (rounded to the nearest dollar) Monthly withholding amount \$.00 = \$6. or \$6.00 (rounded to the nearest dollar) Tax offset claimed = 8.% of \$,6 =.90 or \$.00 (rounded to the nearest dollar) Net monthly withholding amount \$6.00 \$.00 = \$.00. Calculating withholding amounts for payments made on a daily or casual basis The withholding amounts shown in the Tax table for daily and casual workers (NAT 0) can also be expressed in a mathematical form, using the formulas and coefficients outlined on pages and. To work out withholding amounts using the formulas: Multiply (ignoring any cents) by five to work out the weekly equivalent. Add 99 cents to the result. Calculate the weekly amount by applying the coefficients at: Scale where an employee is not claiming the tax-free threshhold Scale where an employee is claiming the tax-free threshhold. Round the result to the nearest dollar. Divide this amount by five to convert it to the daily equivalent. Round the daily withholding amount to the nearest dollar. Where the employee is entitled to the seniors and pensioners tax offset, replace with the appropriate coefficients from Tax table for seniors and pensioners (NAT 66). Accounting software Software written in accordance with the formulas in this schedule should be tested for accuracy against the sample data provided on the following pages. The results obtained when using the coefficients in this schedule may differ slightly from the sums of the amounts shown in the PAYG tax tables. The differences result from the rounding of components. Schedule Statement of formulas for calculating amounts to be withheld 7

8 Weekly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign SAMPLE DATA Weekly withholding amounts Scale Full Medicare Half Medicare Weekly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign Scale Full Medicare Half Medicare Fortnightly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign Fortnightly withholding amounts Scale Full Medicare Half Medicare Fortnightly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign Scale Full Medicare Half Medicare Monthly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign Monthly withholding amounts Scale Full Medicare Half Medicare Monthly Scale No tax-free Scale With tax-free Amounts to be withheld Scale Foreign Scale Full Medicare Half Medicare Schedule Statement of formulas for calculating amounts to be withheld

9 Weekly Spouse only SAMPLE DATA SCALE Weekly Medicare levy adjustment \$ Weekly Spouse only \$ Fortnightly Spouse only Fortnightly Medicare levy adjustment \$ Fortnightly Spouse only \$ Monthly Spouse only Monthly Medicare levy adjustment \$ Monthly Spouse only \$ Schedule Statement of formulas for calculating amounts to be withheld 9

10 Weekly SAMPLE DATA SCALE 6 Weekly Medicare half-levy adjustment Weekly Fortnightly Fortnightly Medicare half-levy adjustment Fortnightly Monthly Monthly Medicare half-levy adjustment Monthly Schedule Statement of formulas for calculating amounts to be withheld

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