Weekly tax payable formula

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damo12

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Oct 27, 2015
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Dear Forum,

Can someone please tell me if there is a formula to calculate the weekly tax payable of an employee and of so, what this formula is? For example, how do I calculate the tax payable for an employee who earns $1,250 (gross) in one week and $730 (gross) in another week? Your help in this matter is much appreciated.

Thank you,
damo12
 
damo12 said:
Dear Forum,

Can someone please tell me if there is a formula to calculate the weekly tax payable of an employee and of so, what this formula is? For example, how do I calculate the tax payable for an employee who earns $1,250 (gross) in one week and $730 (gross) in another week? Your help in this matter is much appreciated.

Thank you,
damo12
Click to expand...
Please show us what you have tried and exactly where you are stuck.

Please follow the rules of posting in this forum, as enunciated at:


Please share your work/thoughts about this problem.
 
Thank you for reminding me about the rules. I should have read them more comprehensively.

I have tried using the following formula that is provided on the ATO's website (https://www.ato.gov.au/Rates/Schedu...mulas-for-calculating-amounts-to-be-withheld/):

The formulas comprise linear equations of the form y = ax − b, where:
However, I don't get the correct answer compared to the Weekly tax tables document provided by the ATO (see attached files).

For Example: y = (0.3277 x 1,220) - 186.2115
= (399.794) - 186.2115
= $213.58

The Weekly tax tables document (for Financial Year 2021) says this should be $238 (with the tax-free threshold).
 

Attachments

  • Weekly tax variables.JPG
    Weekly tax variables.JPG
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  • Weekly-tax-table-from-13-October-2020.pdf
    1 MB · Views: 4
I'm no authority on Australian tax, but I think I've spotted a likely problem. The Weekly tax tables document that you posted says this should be $238 using tax-free threshold scale 2. But you've posted the a & b for scale 5. If you use the a & b for scale 2, then

(0.3477 * 1220) - 186.2119 = 237.9821

which seems quite close. Hope this helps, however I have NO idea which scale you ought to be using ?
 
Cubist said:
I'm no authority on Australian tax, but I think I've spotted a likely problem. The Weekly tax tables document that you posted says this should be $238 using tax-free threshold scale 2. But you've posted the a & b for scale 5. If you use the a & b for scale 2, then

(0.3477 * 1220) - 186.2119 = 237.9821

which seems quite close. Hope this helps, however I have NO idea which scale you ought to be using ?
Click to expand...
Thanks Cubist. Your prompt response and help is much appreciated. I'll trial with some other wage values to see how it goes. Once again, thank you for your help.

Thank you,
damo12.
 
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