Example 1
Employee's weekly earnings are $1,103.45. Employee has completed a Tax file number declaration claiming the tax-free threshold. The employee has also provided a Medicare levy variation declaration with five children shown at question 12.
Therefore, scale 2 is applied.
x = 1,103.99
Weekly withholding amount (y)
= (a × x) − b
= (0.3477 × 1,103.99) − 186.2119
= 197.6454 or $198.00 (rounded to nearest dollar)
Levy adjustment: weekly earnings are greater than WFT ($1,079.60) and less than the SOP ($1,349) appropriate to an employee with five children. Formula (3) applies.
= (1,079.60 × 0.0200) – ([1,103.99 − 1,079.60] × 0.0800)
= 21.5920 − 1.9512
= 19.6408 or $20.00 (rounded to nearest dollar)
Net weekly withholding amount
$198.00 − $20.00 = $178.00
Example 2
Employee's fortnightly earnings are $1,110.30. Employee resides in zone B, has provided a Tax file number declaration that claims the tax-free threshold and a Withholding declaration that claims zone and tax offsets at the tax offsets questions that totals $1,645. The employee has also lodged a Medicare levy variation declaration claiming a full exemption from the Medicare levy.
Therefore, scale 5 is applied.
Convert to weekly equivalent
= (1,110.30 ÷ 2)
= 555.15 or $555 (ignore cents)
x = 555.99
Weekly withholding amount (y)
= (a × x) − b
= (0.1900 × 555.99) − 68.3462
= 37.2919 or $37.00 (rounded to nearest dollar)
Fortnightly withholding amount
$37.00 × 2 = $74.00
Tax offsets claimed at the tax offsets questions on the Withholding declaration
= 3.8% of $1,645
= 62.5100 or $63.00 (rounded to nearest dollar)
Net fortnightly withholding amount
$74.00 − $63.00 = $11.00.
Example 3
Employee's monthly earnings are $4,500.33. Employee has provided a Tax file number declaration claiming the tax-free threshold and claimed a total tax offset of $1,365 at the tax offsets question on the Withholding declaration. The employee has one child but is not eligible for a Medicare levy adjustment. The weekly equivalent of the employee’s earnings exceeds the Medicare levy SOP of $1,009 appropriate to an employee with one child.
Therefore, scale 2 is applied.
Convert to weekly equivalent
= ($4,500.33 + 0.01) × 3 ÷ 13
= 1,038.5400 or $1,038 (ignore cents)
x = 1,038.99
Weekly withholding amount (y)
= (a × x) − b
= (0.3477 × 1,038.99) − 186.2119
= 175.0449 or $175.00 (rounded to nearest dollar)
Monthly withholding amount
$175.00 × 13 ÷ 3 = $758.33 or $758.00 (rounded to nearest dollar)
Tax offset claimed
= 8.3% of $1,365
= 113.2950 or $113.00 (rounded to nearest dollar)
Net monthly withholding amount
$758.00 − $113.00 = $645.00
End of example