Ato Tax Rates 2020 Payg Calculator

Calculate your Pay As You Go (PAYG) withholding tax for the 2019-2020 financial year based on official ATO rates.

Comprehensive Guide to ATO Tax Rates 2020 PAYG Calculator

The Pay As You Go (PAYG) withholding system is how the Australian Taxation Office (ATO) collects income tax from employees’ pay throughout the year. Understanding how PAYG works is crucial for both employers and employees to ensure correct tax withholding and avoid surprises at tax time.

How PAYG Withholding Works in 2019-2020

The 2019-2020 financial year (1 July 2019 to 30 June 2020) had specific tax rates and thresholds that determined how much tax should be withheld from your pay. The PAYG system takes into account:

• Your gross income (before tax)
• Your pay frequency (weekly, fortnightly, monthly)
• Whether you claim the tax-free threshold
• Any HECS/HELP debt repayments
• Medicare levy (typically 2% of taxable income)
• Superannuation contributions

2019-2020 Tax Rates for Residents

The following tax rates applied to Australian residents for the 2019-2020 financial year:

Taxable Income	Tax on this Income
$0 – $18,200	Nil
$18,201 – $37,000	19% for each $1 over $18,200
$37,001 – $90,000	$3,572 plus 32.5% for each $1 over $37,000
$90,001 – $180,000	$20,797 plus 37% for each $1 over $90,000
$180,001 and over	$54,097 plus 45% for each $1 over $180,000

These rates do not include the Medicare levy of 2% or any HECS/HELP repayments which are calculated separately.

Tax-Free Threshold Explained

The tax-free threshold is $18,200 for Australian residents. This means:

• If you earn less than $18,200 in a financial year, you generally won’t pay any income tax
• If you earn more than $18,200, you only pay tax on the amount over $18,200
• You can only claim the tax-free threshold from one payer at a time

If you have multiple jobs, you should generally only claim the tax-free threshold from your main job (highest paying job). For secondary jobs, you would select “No” to the tax-free threshold question in our calculator.

HECS/HELP Repayment Thresholds (2019-2020)

If you have a HECS/HELP debt, repayments are calculated based on your income. The repayment thresholds for 2019-2020 were:

Repayment Income	Repayment Rate
Below $45,881	0%
$45,881 – $52,973	2%
$52,974 – $56,147	2.5%
$56,148 – $59,523	3%
$59,524 – $63,097	3.5%
$63,098 – $66,905	4%
$66,906 – $70,962	4.5%
$70,963 – $75,283	5%
$75,284 – $79,880	5.5%
$79,881 – $84,774	6%
$84,775 – $89,995	6.5%
$89,996 – $95,571	7%
$95,572 – $101,525	7.5%
$101,526 – $107,883	8%
$107,884 and above	8.5%

Note that repayment income is different from taxable income. It includes:

• Your taxable income
• Total net investment losses
• Reportable fringe benefits
• Reportable super contributions
• Exempt foreign employment income

Medicare Levy 2019-2020

The Medicare levy is typically 2% of your taxable income, in addition to the income tax you pay. The levy helps fund Australia’s public health system.

You may be eligible for a reduced Medicare levy or exemption if:

• You’re on a low income
• You’re a foreign resident
• You’re not entitled to Medicare benefits
• You’re in a Defence Force overseas posting

The Medicare levy low-income thresholds for 2019-2020 were:

• Singles: $22,398
• Families: $37,794 (plus $3,471 for each dependent child or student)
• Single seniors and pensioners: $35,418
• Family seniors and pensioners: $49,304 (plus $3,471 for each dependent child or student)

Superannuation Guarantee 2019-2020

For the 2019-2020 financial year, the superannuation guarantee rate was 9.5%. This is the minimum percentage of your ordinary time earnings that your employer must pay into your super fund.

Some important points about superannuation:

• The super guarantee is calculated on your ordinary time earnings (generally what you earn for your ordinary hours of work)
• It doesn’t include overtime payments (unless overtime is part of your ordinary hours)
• You can make salary sacrifice contributions in addition to the super guarantee
• There are concessional contribution caps ($25,000 for 2019-2020)

How to Use the PAYG Withholding Calculator

Our calculator helps you estimate how much tax should be withheld from your pay based on the 2019-2020 tax rates. Here’s how to use it:

1. Enter your gross income: This is your annual salary before tax
2. Select your pay frequency: How often you get paid (weekly, fortnightly, or monthly)
3. Tax-free threshold: Select “Yes” if this is your only job or main job
4. HECS/HELP debt: Enter your debt amount if you have one
5. Superannuation rate: Select your super rate (9.5% was standard in 2019-2020)
6. Click “Calculate”: See your estimated withholding amounts

The calculator will show you:

• Your gross income
• PAYG withholding tax amount
• Medicare levy (2%)
• HECS/HELP repayment (if applicable)
• Superannuation amount
• Your net pay (take-home pay)

Important Disclaimer: This calculator provides an estimate only and is based on the tax rates for the 2019-2020 financial year. Your actual tax withholding may differ due to various factors including but not limited to: tax offsets, work-related deductions, investment income, or other personal circumstances. For precise calculations, consult a registered tax agent or use the official ATO calculators. The information provided does not constitute financial advice.

Common PAYG Withholding Questions

Why is my PAYG withholding different from what the calculator shows?

Several factors can affect your actual withholding:

• Your employer might be using slightly different calculation methods
• You might have additional withholding variations in place
• Your pay might include bonuses, commissions, or other irregular payments
• You might have a Study and Training Support Loan (STSL) in addition to HECS/HELP

What if I have multiple jobs?

If you have more than one job:

• Only claim the tax-free threshold from your main (highest paying) job
• For your second job, select “No” to the tax-free threshold question
• You may end up paying more tax during the year but will get it back as a refund when you lodge your tax return

How does the calculator handle bonuses or irregular payments?

This calculator is designed for regular salary payments. For bonuses or irregular payments (like commissions or back pay), different withholding rates apply. The ATO provides specific withholding schedules for different payment types.

What’s the difference between PAYG withholding and PAYG instalments?

PAYG withholding is the tax taken from your pay by your employer. PAYG instalments are regular prepayments of your expected tax liability that you might need to make if you:

• Run a business
• Have investment income
• Are a self-managed super fund trustee

Official Resources and Further Reading

For the most accurate and up-to-date information, refer to these official resources:

• ATO Individual Income Tax Rates – Official tax rates for different financial years
• ATO PAYG Withholding Calculator – The official ATO calculator for current financial year
• StudyAssist HECS-HELP Information – Official information about HECS/HELP debts and repayments
• ATO Medicare Levy Information – Detailed information about the Medicare levy

Historical Context: How Tax Rates Have Changed

The 2019-2020 tax rates were part of the government’s personal income tax plan. Here’s how they compared to previous years:

Financial Year	Tax-Free Threshold	32.5% Threshold	37% Threshold	45% Threshold
2017-2018	$18,200	$37,000	$87,000	$180,000
2018-2019	$18,200	$37,000	$90,000	$180,000
2019-2020	$18,200	$37,000	$90,000	$180,000
2020-2021	$18,200	$37,000	$90,000	$180,000

Note that while the thresholds remained the same from 2018-2019 to 2019-2020, there were changes to the Low and Middle Income Tax Offset (LMITO) which provided additional tax relief for eligible taxpayers.

Tax Offsets and Rebates in 2019-2020

In addition to the standard tax rates, several tax offsets were available in 2019-2020 that could reduce your tax payable:

• Low and Middle Income Tax Offset (LMITO): Up to $1,080 for individuals with taxable income up to $126,000
• Low Income Tax Offset (LITO): Up to $445 for individuals with taxable income up to $66,667
• Senior Australians and Pensioners Tax Offset (SAPTO): For older Australians who meet certain conditions
• Private Health Insurance Rebate: A rebate on private health insurance premiums

These offsets are applied when you lodge your tax return and can result in a refund if the offset amount is greater than the tax you owe.

PAYG Withholding for Different Payment Types

The ATO provides different withholding schedules depending on the type of payment:

• Schedule 1 – Weekly, fortnightly, monthly payers (most common for regular salaries)
• Schedule 2 – Withholding for unused leave on termination
• Schedule 3 – Bonus, commission, and similar payments
• Schedule 4 – Accommodation and fringe benefits
• Schedule 5 – Superannuation lump sums
• Schedule 6 – Superannuation income streams
• Schedule 7 – Statement of formulas (mathematical formulas used in the schedules)

Our calculator uses the Schedule 1 formulas which are appropriate for regular salary and wage payments.

What to Do If Your Withholding Seems Wrong

If you think your employer is withholding too much or too little tax:

1. Check your pay slip: Verify the amounts being withheld
2. Use the ATO calculator: Compare with the official ATO PAYG withholding calculator
3. Talk to your payroll department: There might be a simple explanation
4. Submit a withholding variation: If your circumstances have changed (e.g., you have significant deductions), you can apply to have less tax withheld by submitting a PAYG withholding variation application
5. Contact the ATO: If you can’t resolve the issue with your employer

Planning Ahead: Using Your PAYG Information

Understanding your PAYG withholding can help you:

• Budget effectively: Know exactly how much you’ll take home each pay period
• Plan for tax time: Avoid surprises when you lodge your return
• Manage cash flow: Especially important if you’re saving for a big purchase
• Identify potential issues: Like if you’re not having enough tax withheld
• Make informed decisions: About salary sacrificing, additional super contributions, etc.

If you’re consistently getting large refunds at tax time, you might want to consider adjusting your withholding so you have more money in your pocket throughout the year. Conversely, if you owe money at tax time, you might need to increase your withholding.

Special Circumstances Affecting PAYG Withholding

Several special circumstances can affect how much tax is withheld from your pay:

• Working holiday makers: Different tax rates apply (15% on the first $37,000)
• Foreign residents: Don’t qualify for the tax-free threshold
• Defence Force members: May have different withholding arrangements
• Seasonal workers: May have variable withholding depending on their income
• Employees with multiple jobs: Need to manage their tax-free threshold claims

If any of these circumstances apply to you, you may need to use different calculation methods or consult with a tax professional.

The Relationship Between PAYG and Your Tax Return

It’s important to understand that PAYG withholding is just an estimate of your final tax liability. When you lodge your tax return:

• The ATO calculates your actual tax liability based on your total income for the year
• They compare this to the total amount withheld through PAYG
• If too much was withheld, you get a refund
• If not enough was withheld, you’ll have a tax debt

This is why it’s important to:

• Keep track of all your income (not just salary – include investments, side jobs, etc.)
• Keep receipts for work-related expenses and other deductions
• Be aware of any tax offsets you might be eligible for
• Consider making voluntary repayments if you have a HECS/HELP debt

Common Mistakes to Avoid with PAYG Withholding

Some common pitfalls to watch out for:

• Claiming the tax-free threshold from multiple employers: This can lead to a large tax bill at the end of the year
• Not updating your details: If your circumstances change (e.g., you get a second job), update your tax file number declaration
• Ignoring HECS/HELP repayments: These are in addition to your income tax and can significantly reduce your take-home pay
• Not considering the Medicare levy: It’s an additional 2% on top of your income tax
• Forgetting about superannuation: While it’s not tax, it does reduce your take-home pay

Being aware of these common mistakes can help you avoid unpleasant surprises when you receive your pay or lodge your tax return.

How Employers Calculate PAYG Withholding

Employers use several pieces of information to calculate how much to withhold:

1. Your Tax File Number (TFN) declaration: This tells them whether to withhold at the higher “no TFN” rate
2. Your claimed tax-free threshold: Whether you’ve claimed it with them or not
3. Your pay frequency: Weekly, fortnightly, or monthly
4. Your gross pay amount: Before any deductions
5. Any withholding variations: If you’ve applied to have more or less tax withheld
6. ATO withholding schedules: They use the official ATO formulas to calculate the exact amount

Employers are legally required to withhold the correct amount of tax and remit it to the ATO on your behalf.

PAYG Withholding for Different Income Levels

Here’s how PAYG withholding typically works for different income levels (assuming tax-free threshold claimed, no HECS debt, weekly pay):

Annual Salary	Weekly Gross Pay	Estimated Weekly PAYG	Estimated Weekly Net Pay
$40,000	$769.23	$45.38	$651.51
$60,000	$1,153.85	$153.85	$877.66
$80,000	$1,538.46	$292.31	$1,123.81
$100,000	$1,923.08	$461.54	$1,339.20
$120,000	$2,307.69	$653.85	$1,531.50

Note: These are estimates only and don’t include HECS repayments or superannuation. Actual amounts may vary.

PAYG Withholding and the Cash Flow Boost

During the 2019-2020 financial year, the Australian Government introduced the Cash Flow Boost as part of its economic response to COVID-19. This provided:

• Tax-free payments to eligible businesses
• Credits equal to 100% of PAYG withheld from salary and wages
• Minimum payment of $10,000 and maximum of $50,000
• Additional payments in the June-September 2020 period

While this didn’t directly affect individual PAYG withholding calculations, it did impact many businesses’ cash flow and payroll processing during this period.

Comparing 2019-2020 with Current Tax Rates

Since 2019-2020, there have been several changes to tax rates and thresholds. The main differences include:

• Increased tax offsets: The Low and Middle Income Tax Offset (LMITO) was increased in subsequent years
• Changed thresholds: The 19% tax bracket was extended in later years
• Superannuation guarantee increases: The rate has gradually increased from 9.5%
• HECS repayment thresholds: These have been adjusted in subsequent years

If you’re looking at historical payslips from 2019-2020, remember that the calculations were based on the rates that applied at that time.

Final Tips for Managing Your PAYG Withholding

To make the most of the PAYG system:

1. Review your pay slips regularly: Check that the correct amount is being withheld
2. Update your TFN declaration: Whenever your circumstances change
3. Use the ATO calculator: To check your withholding if you’re unsure
4. Consider your total income: Not just your salary – include investments, side jobs, etc.
5. Plan for tax time: Set aside money if you think you might owe tax
6. Seek professional advice: If your situation is complex

Understanding PAYG withholding helps you take control of your finances and avoid surprises at tax time. While our calculator provides a good estimate, always refer to official ATO resources or consult a tax professional for precise information.