Understanding how much tax to withhold from employee wages is crucial for businesses to remain compliant with Australian tax regulations. The ATO provides tax tables for different pay frequencies—weekly, fortnightly, or monthly—to guide employers in calculating the correct PAYG withholding amounts. This ensures employees meet their tax obligations without facing a large end-of-year bill. Let’s explore how these tax tables can help streamline your payroll process!
Tax Tables
The ATO produces a range of tax tables to help you work out how much to withhold from employee payments or other payees. The ATO has an online tax withheld calculator that gives you the correct amount of tax to withhold.
The most common tax tables that you’ll need to refer to as an employer are the weekly, fortnightly or monthly tax tables – depending on how often you make pay runs.
Using the ATO tax tables below, working out PAYG withholding for your employees is easy.
Weekly tax table
If you pay your employees on a weekly basis, you’ll need to use the ATO’s weekly tax table.
Fortnightly tax table
If you pay your employees on a fortnightly basis, you’ll need to use the ATO’s fortnightly tax table.
Monthly tax table
If you pay your employees on a monthly basis, you’ll need to use the ATO’s monthly tax table.
Single Touch Payroll
Single Touch Payroll (STP) is an ATO compliance regulation that requires employers to send employee payroll information including salary, wages, PAYG withholding and superannuation to the ATO at the same time as their standard pay run.
Single Touch Payroll became mandatory for ALL employers on 1 July 2021. Find out more about Single Touch Payroll.
Payroll software
The simplest way to manage payroll processing and PAYG withholding for your employees is through payroll software such as Reckon One Payroll. You can manage wages, leave, super, and Single Touch Payroll directly from your Payroll software.
Our software makes it simple to remain compliant and stay up to date with the latest payroll and tax compliance changes. Automated updates such as PAYG tax-tables, superannuation guarantee rates and SuperStream requirements are automatically pushed into Reckon One Payroll.
