Published: August 2025, Updated: July 2026
Understanding how to withhold the correct amount of tax from employee payments is essential for small and medium businesses in Australia. The Australian Taxation Office (ATO) provides tax tables to help employers calculate Pay As You Go (PAYG) withholding amounts based on pay periods.
These tables ensure compliance with tax laws and help employees meet their income tax obligations throughout the year. This article covers the weekly, fortnightly, and monthly tax tables for the 2026-27 tax year, including the changes that took effect on 1 July 2026, with insights, facts, and practical examples for business owners.
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Tax tables are tools issued by the ATO that outline the amounts employers must withhold from employee wages for income tax purposes. They are based on the progressive income tax rates for Australian residents, which include brackets starting from nil tax on earnings up to $18,200 annually, rising to 45% on income over $190,000. For a full breakdown of the current brackets, see our guide to Australian tax brackets for businesses.
For small and medium businesses, using these tables correctly reduces the risk of under-withholding, which could lead to penalties, or over-withholding, which affects employee cash flow.
The tables apply to payments such as salaries, wages, allowances, and leave loading. They do not cover lump sum payments or payments to contractors under voluntary agreements, which have separate schedules. The ATO's Tax withheld calculator is a free online tool for checking withholding amounts.
Different pay frequencies suit various business models and employee arrangements in Australian small and medium enterprises. Here are some common use cases:
Choosing the right table based on your pay cycle ensures accurate withholding and supports Single Touch Payroll reporting, mandatory for all businesses. Also check out some of our free practical tools to help your SME today and see useful tools such as our BAS estimator.
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Unlike last year, the 2026-27 tax year brings new tax tables. The ATO published updated weekly, fortnightly, and monthly schedules that apply to all payments made from 1 July 2026, and employers must use them. Two changes drive the update.
The 16% rate dropped to 15%. Income between $18,201 and $45,000 is now taxed at 15% instead of 16%, worth up to $268 per year per employee. Spread across pay periods, that is roughly $5 a week, $10 a fortnight, or $22 a month in extra take-home pay for anyone earning $45,000 or more. The withholding coefficients in Schedule 1 changed accordingly, so every earnings band withholds slightly less than it did in 2025-26. A further cut to 14% is legislated for 1 July 2027, which means the tables will change again next year.
STSL thresholds moved. The study and training support loans schedule was also reissued: the repayment threshold rose from $67,000 to $69,528, with the marginal bands above it shifting to $129,717 and $186,050. Employees with study debts will see a slightly smaller STSL component withheld on the same pay.
If you use Xero, MYOB, QuickBooks, or another STP-enabled product, the 2026-27 tables load automatically through software updates. It is still worth running one test pay and confirming the withholding on a sample employee has dropped slightly from June figures. If withholding is identical to last year for an employee earning over $18,200, your software is still on the old tables.
Two things did not change: withholding for employees who have not provided a valid Tax File Number remains 47% for residents and 45% for foreign residents (ignoring cents), and the Lump Sum E treatment for back payments accrued more than 12 months earlier (in place since 1 July 2025) continues to apply.
Note that the bigger payroll change this financial year sits outside the tax tables entirely: Payday Super began on 1 July 2026, requiring super to be paid with every pay run.
To use the tax tables:
The ATO offers a tax withheld calculator for precise amounts, taking into account factors like HELP debts or offsets. For software developers, the ATO provides formulas in Schedule 1 (NAT 1004), using linear equations like withholding = (a × earnings) - b, where a and b are coefficients for each earnings bracket. The coefficients were reissued for 2026-27 to reflect the 15% rate.
If your business has unusual pay cycles, such as 27 fortnightly pays in a year, inform employees as it may result in slight under-withholding, and they can request additional amounts.
The weekly tax table is for businesses paying employees every week. It scales the annual tax rates to a 52-week year. The $18,200 tax-free threshold works out to $350 per week, and because the low income tax offset is built into the table, the practical nil-withholding cut-off sits slightly above that when the threshold is claimed. Refer to the ATO's Weekly tax table for the full 2026-27 schedule.
For fortnightly payments (every two weeks), this table assumes 26 pays per year. It's suitable for many small businesses with bi-weekly cycles. Note that fortnightly withholding is not always exactly double the weekly figure due to rounding, so always use the table matching your actual pay cycle. Refer to the ATO's Fortnightly tax table for the full 2026-27 schedule.
Monthly payments use this table, based on 12 pays annually. It's common for salaried roles in medium businesses. Refer to the ATO's Monthly tax table for the full 2026-27 schedule.
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Add the study loan component from the ATO's separate STSL tables. For 2026-27, the component only applies once annualised earnings exceed $69,528. For example, an employee earning $2,900 per fortnight annualises to $75,400, so the STSL component is 15% of the amount over the threshold: about $881 for the year, or roughly $34 per fortnight. Your payroll software applies the exact schedule amount automatically once the employee's STSL flag is set. See our STSL guide for employers for setup details.
Use foreign resident rates: 30% on income up to $135,000 annually, with higher rates above. Foreign residents do not receive the tax-free threshold or pay the Medicare levy. Withhold 45% if no TFN is provided.
It's $18,200 annually. Employees claim it on their TFN declaration for primary jobs to reduce withholding.
If employees qualify for reductions (e.g., low income with dependants), use adjustment tables to lower withholding.
The ATO reissues tables whenever rates or thresholds change. The 2026-27 tables took effect on 1 July 2026 because of the 15% rate cut and new STSL thresholds, and the tables will change again on 1 July 2027 when the rate falls to 14%. Always confirm your payroll software is on the current year's schedules at the start of each financial year.
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We review and check this guide periodically. At the time of writing (July 2026), all information was current. Withholding rates and thresholds are as published by the ATO for the 2026-27 financial year and are subject to change. Scale Suite is a registered BAS Agent, not a licensed tax advisor or financial advisor. This content is general information only and does not constitute professional tax, financial, or legal advice. Always use the ATO's current published tables or your STP-enabled payroll software for actual withholding.
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