Coefficients to use in formulas for withholding from weekly payments

If the employee didn't claim the tax-free threshold

If the tax-free threshold isn't claimed in Tax file number declaration – Scale 1

Weekly earnings (x) less than $	a	b
150	0.1600	0.1600
371	0.2117	7.7550
515	0.1890	-0.6702
932	0.3227	68.2367
2,246	0.3200	65.7202
3,303	0.3900	222.9510
3,303 & over	0.4700	487.2587

If the employee claimed the tax-free threshold

If the employee claimed the tax-free threshold in Tax file number declaration – Scale 2

Weekly earnings (x) less than $	a	b
361	–	–
500	0.1600	57.8462
625	0.2600	107.8462
721	0.1800	57.8462
865	0.1890	64.3365
1,282	0.3227	180.0385
2,596	0.3200	176.5769
3,653	0.3900	358.3077
3,653 & over	0.4700	650.6154

Foreign residents – Scale 3

Weekly earnings (x) less than $	a	b
2,596	0.3000	0.3000
3,653	0.3700	181.7308
3,653 & over	0.4500	474.0385

If the employee didn't give a TFN

If a tax file number (TFN) was not provided by employee – Scale 4

Earnings	Tax rate
Resident $1 & over	0.4700
Foreign resident $1 & over	0.4500

If the employee claims an exemption from Medicare levy

Full exemption

If the employee claimed the full exemption from Medicare levy in Medicare levy variation declaration – Scale 5

Weekly earnings (x) less than $	a	b
361	–	–
721	0.1600	57.8462
865	0.1690	64.3365
1,282	0.3027	180.0385
2,596	0.3000	176.5769
3,653	0.3700	358.3077
3,653 & over	0.4500	650.6154

Half exemption

If the employee claimed a half exemption from Medicare levy in Medicare levy variation declaration – Scale 6

Weekly earnings (x) less than $	a	b
361	–	–
721	0.1600	57.8462
843	0.1690	64.3365
865	0.2190	106.4962
1,053	0.3527	222.1981
1,282	0.3127	180.0385
2,596	0.3100	176.5769
3,653	0.3800	358.3077
3,653 & over	0.4600	650.6154

Notes on using the scales

27 fortnightly, or 53 weekly pays in the year

If you have 27 fortnightly or 53 weekly pays in a financial year, refer to Withholding additional amounts from employee earningsThis link will download a file.

Using different scales

Scale 1 contains a negative value for one of the b coefficients. This is intentional.

Scales 1, 2, 3, 5 and 6 may be applied only if employees have provided their TFN.

For scale 4 no coefficients are necessary. To calculate withholding, apply the tax rate to earnings, ignoring any cents in earnings and in the withholding result.

Scale 1 and 2 apply whether or not the employee is entitled to any leave loading.

Tax offsets may be allowed only where scales 2, 5 or 6 are applied.

Scale 1, 2, 4 and 6 incorporate the Medicare levy. Scale 4 incorporates the Medicare levy for residents only.

For scale 2 no Medicare levy is payable by a person whose taxable income for the year is $26,000 ($500 per week) or less. If the taxable income exceeds $26,000 but is less than $32,500 ($625 per week), the levy is shaded in at the rate of 10% of the excess over $26,000. If a person’s taxable income is $32,500 ($625 per week) or more, Medicare is levied at the rate of 2% of total taxable income.

The Medicare levy is also shaded in for scale 6. The Medicare levy parameters for scales 2 and 6 are as follows.

Medicare levy parameters

Parameter	Scale 2	Scale 6
Weekly earnings threshold	500	843
Weekly earnings shade-in threshold	625	1,053
Medicare levy family threshold	43,846	43,846
Weekly family threshold divisor	52	52
Additional child	4,027	4,027
Shading out point multiplier	0.1000	0.0500
Shading out point divisor	0.0800	0.0400
Weekly levy adjustment factor	500.0000	843.1900
Medicare levy	0.0200	0.0100