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RoseyK's avatar
RoseyK
Experienced Cover User
2 years ago
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TAX EXEMPTION

Good morning,

 

I have a new employee who has commenced and is 15 years old. They are claiming an exemption to pay Tax as they are under 18. Just confirming the TFN I enter is 333 333 333?  Also, if they earn in a week above the tax free threshold and tax is calculated on their pay, is that required to be with held or do I I manually overide and $0.00 the tax?  

 

Thanks,

Rose

  • gavin12345's avatar
    gavin12345
    2 years ago

    Hi RoseyK 

     

    There is no such thing as an employee exempt from tax, only from providing a TFN. As per the ATO:

     

    Payee under eighteen – where the payee is under the age of eighteen and claims the general exemption and does not earn enough for tax to be deducted, they may claim an exemption from quoting a TFN. In this case the code 333333333 must be used.

     

    N.B.If circumstances change and the payee subsequently earns a level of income that attracts tax, a TFN will be required to be provided at that time.

     

    Set the employee as claiming the tax free threshold. Once the employee earns, tax will be calculated and should be deducted and sent to the ATO. Employee should also then provide a TFN.

     

    Regards

    Gavin

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  • gavin12345's avatar
    gavin12345
    Ultimate User
    2 years ago

    Hi RoseyK 

     

    There is no such thing as an employee exempt from tax, only from providing a TFN. As per the ATO:

     

    Payee under eighteen – where the payee is under the age of eighteen and claims the general exemption and does not earn enough for tax to be deducted, they may claim an exemption from quoting a TFN. In this case the code 333333333 must be used.

     

    N.B.If circumstances change and the payee subsequently earns a level of income that attracts tax, a TFN will be required to be provided at that time.

     

    Set the employee as claiming the tax free threshold. Once the employee earns, tax will be calculated and should be deducted and sent to the ATO. Employee should also then provide a TFN.

     

    Regards

    Gavin