PAYG Withholding Calculator
Free PAYG withholding calculator for Australian employers. Runs the ATO Schedule 1 statement of formulas (NAT 1004-06.2026 for FY 2026-27), the method the Commissioner requires employers and payroll software to use, so it returns the tax table figure rather than an annualised approximation. Covers FY 2026-27, FY 2025-26 and FY 2024-25, every Schedule 1 scale including a resident who does not claim the tax-free threshold, foreign residents, working holiday makers and no-TFN withholding, plus the separate Schedule 8 study loan component.
Employee payment
FY 2026-27A resident who does not claim the tax-free threshold is still a resident, Scale 1.
- Tax to Withhold
- $0.00
- Per fortnightly pay period
- Net Pay
- $0.00
- Effective rate: 0.0%
Withholding Summary
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PAYG withholding for Australian employers
As an employer, you're required to withhold tax from payments to employees under the PAYG withholding system. The amount to withhold is determined by the ATO's tax tables, which take into account the employee's income level, residency status, tax-free threshold claim, and any HELP debt.
ATO tax tables and the formula behind them
The ATO publishes weekly, fortnightly and monthly tax tables, and it publishes the formulas those tables were built from: Schedule 1, the “statement of formulas for calculating amounts to be withheld”. This calculator runs the formulas, so it returns the table figure rather than something close to it.
How to work out PAYG withholding
Schedule 1 works on a weekly-equivalent basis. It does not annualise the pay and divide, and the schedule says so in as many words. The steps are:
- Resolve the employee's scale from their TFN declaration: no TFN is the flat no-TFN rate; a foreign resident is Scale 3; a resident claiming the tax-free threshold is Scale 2; a resident not claiming it is Scale 1. A working holiday maker is not Schedule 1 at all, they sit under Schedule 15.
- Take the weekly earnings, drop the cents, and add 99 cents. That figure is x.
- Read the coefficients a and b for the band x falls in, then withhold y = a × x − b, rounded to the nearest dollar (exactly 50c rounds up).
- For a fortnightly pay, halve it, run the weekly formula, then double the answer. For a monthly pay, convert to a weekly equivalent (× 3 ÷ 13), run the formula, then convert back (× 13 ÷ 3).
LITO and the 2% Medicare levy are already baked into the coefficients. Adding them on top double counts them. A study or training loan is the one thing you do add: it is a separate Schedule 8 component on the same weekly-equivalent basis.
Worked example: $1,500 a week, tax-free threshold claimed
An employee earns $1,500 gross per week, claims the tax-free threshold, and has no study loan. That is Scale 2. In FY 2026-27:
- x = $1,500 with the cents dropped, plus 99c = $1,500.99
- $1,500.99 falls in the band where a = 0.32 and b = 181.7319
- y = 0.32 × $1,500.99 − $181.7319 = $298.58, rounded to the nearest dollar = $299 a week
If the same employee did not claim the tax-free threshold, they move to Scale 1, not to foreign resident rates: a = 0.32, b = 71.6508, so y = $409 a week. Foreign resident rates would take $450 a week, about $2,132 a year more than the law requires from someone on a second job.
Reporting PAYG withholding
Report amounts withheld on your BAS at label W1 (total salary and wages paid) and W2 (total amount withheld). At the end of the financial year you make an STP finalisation declaration, generally by 14 July, and your employees see the finalised figures as an Income Statement in myGov. Payment summaries and the PAYG withholding annual report only apply to the rare payments still outside Single Touch Payroll.
To be straight about what we do and do not do: OneBookPlus does not lodge STP pay events to the ATO. You still report each pay run through STP-enabled software.
Frequently asked questions
How do I calculate PAYG withholding?
Take the employee's gross pay for the period, identify their withholding scale from their TFN declaration (residency, whether they claim the tax-free threshold, whether they quoted a TFN), then apply the ATO Schedule 1 formula for that scale. Schedule 1 works on a weekly-equivalent basis: round the weekly earnings down to whole dollars, add 99 cents, multiply by the scale's coefficient a, subtract its coefficient b, and round the result to the nearest dollar. A fortnightly pay is halved, run through the weekly formula, then doubled. This calculator runs those published coefficients (NAT 1004-06.2026 for FY 2026-27), so it returns the same figure as the ATO tax tables rather than an annualised approximation.
My employee has a second job and does not claim the tax-free threshold. What do I withhold?
You withhold at Schedule 1 Scale 1, which is a resident scale: they keep the Medicare levy treatment and the resident rate ladder, they just lose the tax-free threshold. Do not withhold at foreign resident rates. On $1,500 a week, Scale 1 withholding for FY 2026-27 is $409, where foreign resident rates would take $450. Set 'Claims tax-free threshold' to off and leave residency on Australian resident.
What is PAYG withholding?
PAYG (Pay As You Go) withholding is the system where employers withhold tax from payments to employees and send it to the ATO. The amount withheld depends on the employee's income level, whether they claim the tax-free threshold, and whether they have a HELP debt.
What if an employee doesn't provide a TFN?
If an employee doesn't provide a Tax File Number (TFN) within 28 days of starting work, you must withhold tax at the top marginal rate of 47% (including Medicare levy) from every dollar of their pay. No tax-free threshold applies.
How often do I remit withheld tax?
Most small to medium employers remit PAYG withholding quarterly through their BAS. Large employers (withholding $25,000+ per month) remit monthly. The ATO notifies you of your reporting cycle.
Do I withhold from contractor payments?
Generally no, unless the contractor doesn't quote an ABN. If no ABN is quoted, you must withhold 47% from the payment. Contractors manage their own tax obligations.
How does claiming the tax-free threshold change withholding?
When an employee claims the tax-free threshold on their TFN declaration, the first $18,200 of annual income is tax-free, so less is withheld each pay. Employees should only claim it from one employer at a time, usually the one paying the highest, most regular income, to avoid a tax bill at year end.
Sources & methodology
How we calculate this
This calculator runs the ATO Schedule 1 statement of formulas (NAT 1004-06.2026 for FY 2026-27), the method the Commissioner requires employers and payroll software to use. It resolves the withholding scale from the TFN declaration you describe, computes the amount on a weekly-equivalent basis (never by annualising and dividing), and rounds to the nearest dollar. LITO and the Medicare levy are already inside the scale coefficients, so they are not added again. A study or training loan adds a separate Schedule 8 (NAT 3539) component, and no TFN means the flat no-TFN rate on the whole pay. Figures are computed in your browser and match the ATO published tax tables.
Authoritative sources
Reviewed by Bishal Shrestha, Founder of OneBookPlus, 10+ years building tools with Australian tax-agent and BAS-agent practices. Rates and thresholds last verified: .
Disclaimer: This calculator produces estimates only and is not tax advice. Tax outcomes depend on your individual circumstances. For decisions that affect your tax position, consult a registered tax agent or the ATO directly.
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