Tax File Number

If an employee does not provide a Tax File Number (TFN), you must deduct tax at the top marginal rate plus the Medicare levy, unless the employee is exempted from providing a TFN.

1 From the Lists menu, choose Employees.

2 Click to select the employee and then click Employee>Edit. The Edit Employee window is displayed.

3 Click the Taxation tab.

4 From the Tax Scale drop-down list, select the Tax File Number Not Provided tax rate.

5 Click OK.

Exceptions

Employees exempt from the requirement of providing a TFN

$image\bullet.gif$ Children under 16 who don't earn enough to pay tax; and

$image\bullet.gif$ Employees who receive a service pension from the Department of Social Security or Department of Veteran's Affairs. This does not include Newstart, Sickness, Partner or Parenting Allowances; Job Search or Special Benefit.

Employees in the process of getting a TFN

If the employee has lodged a TFN Application Enquiry form with the ATO, you must allow 28 days for them to give you their TFN. During this 28 day period, you must treat their TFN Declaration form as if a TFN has been supplied. If the ATO issues the employee an "Interim Notice", you should continue to treat them as if a TFN has been supplied.

If you aren't advised of the employee's TFN within 28 days, and there is no interim notice, you must deduct tax at the top marginal rate plus Medicare levy (as explained above) until you are provided with a TFN.