Gross pay estimator

Table of contents

Payee

Payer

Commissioner's instalment rate (CIR)

Pay as you go (PAYG) withholding variation

Payment summary

Statutory declaration

Superannuation

Take home pay

Tax offset

Withholding declaration

Payee

A person who receives a payment, for example, salary or wages.

Payer

A person (or group) who makes a payment to another, for example, pays people salary or wages.

Commissioner's instalment rate (CIR)

If you have a voluntary agreement with your payer, your payer must withhold an amount from your payment at the withholding rate. The withholding rate will be either your Commissionerís instalment rate (CIR) or a flat rate of 20%.

If your CIR is greater than 20%, your CIR will be the withholding rate. If your CIR is less than or equal to 20%, your payer must withhold at 20% unless you both agree that your CIR will apply. If your CIR is not known at the time of the agreement, the flat rate of 20% applies.

It is your responsibility to notify your CIR to your payer in your 'voluntary agreement'. Agreement forms are available from the ATO (NAT 2772) or you can develop your own voluntary agreement with your payer - provided it contains the same information as the ATO form.

Pay as you go (PAYG) withholding variation

Under tax law, the Commissioner of Taxation may vary the amount a payer withholds from a withholding payment to meet the special circumstances of a particular case or class of cases.

The main purpose of varying your withholding rate is to ensure that the amounts withheld during the income year best meet your annual income tax liability. You might request a variation if, for example, the regular withholding rate would lead to a large credit at the end of the income year because your tax deductible expenses are higher than normal.

For more information, see PAYG withholding - varying your PAYG withholding on ato.gov.au

Payment summary

Payment summaries show the total payments made and the amounts withheld for each worker during the financial year ending 30 June. Generally, payers must give each of their workers a payment summary by 14 July each year (or earlier if requested).

A Pay as you go (PAYG) payment summary - individual non-business is a document issued by an employer to an employee at the end of each income year.

It contains details of the employee's:

Statutory declaration

You may have not received a payment summary from your payer. To complete a tax return without a payment summary, you need to complete a statutory declaration.

There are two types of statutory declarations used in the ATO. They are:

Superannuation

A system where money is placed in a fund to provide for a person's retirement.

Take home pay

Take home pay is your net pay - that is, your gross pay less tax, HELP (Higher Education Loan Program) and SFSS (Student Financial Supplement Scheme) - before any further deductions are made from the pay.

Tax offset

Tax offsets directly reduce the amount of tax you must pay. They are not the same as deductions, which are taken off your income before your tax is worked out.

With a tax offset, the ATO works out the tax due on your taxable income then reduces it by the total amount of your tax offsets.

Generally tax offsets can only reduce the amount of tax you pay to zero. That is, if your tax offsets are greater than your tax due, you do not get a refund of the excess amount. However, there are some exceptions to this - the following offsets will allow a refund of the excess amount:

Tax offsets, in general, do not reduce your Medicare levy; however, where you have excess refundable tax offsets, you can use them to reduce your tax, including your Medicare levy.

Withholding declaration

You will complete a withholding declaration either:

To continue your session, select the BACK button on your browser.


For other important information, go to: