PAYG withholding

Calculating amount to be withheld

Leaving employment because of genuine redundancy, invalidity, or an early retirement scheme
Once the component values have been calculated, specific withholding rates are applied to each, as shown in the following table.

Table: Withholding rates

Component Pre 16 August 1978 Post 15 August 1978 Withholding 5% of total at marginal rate, disregarding any cents. 31.5%, disregarding any cents.

Leaving employment for other reason

Once the component values have been calculated, specific withholding rates are applied to each, as shown in the following table.

Table: Withholding rates

Component Pre16 August 1978 Post 15 August 1978 Post 17 August 1993 Withholding 5% of total at marginal rate, disregarding any cents. 31.5%, disregarding any cents. If this unused long service leave component (and unused annual leave) is less than $300, withhold the lesser of the amount worked out using the steps below or 31.5% of the payment, disregarding any cents. If this unused long service leave component (and unused annual leave) is $300.00 or more: Step 1 add 5% of the pre-16 August 1978 component to this component

Step 2

divide the amount by the number of regular periods in a financial year (52 weeks, 26 fortnights or 12 months)

Step 3 Step 4

disregard any cents add amount at step 3 to normal gross earnings for a single pay period.

Step 5

using the regular PAYG withholding tax table used to calculate the amount to be withheld, obtain the amount to be withheld from the figure calculated at step 4

Step 6

subtract the amount calculated at step 5 from the amount withheld from the payee's normal gross earnings, and

Step 7

multiply the amount calculated at step 6 by the number of regular pay periods in a financial year.

Last modified: 30 Jun 2010

QC 19081

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