Published: August 2025

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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 focuses on the weekly, fortnightly, and monthly tax tables for the 2025-26 tax year, offering insights, facts, and practical examples to assist business owners.

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What are Tax Tables?

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 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. Refer to the ATO's Tax withheld calculator available on their website at  for an online tool to calculate withholding amounts.

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Use Cases for These Tax Tables

Different pay frequencies suit various business models and employee arrangements in Australian small and medium enterprises. Here are some common use cases:

• Weekly Tax Table: Ideal for businesses with casual or part-time staff, such as retail shops, cafes, or hospitality venues where employees work variable hours and are paid weekly. For instance, a small cafe owner might use this table for baristas earning around $500 per week, ensuring quick compliance for frequent pay runs.
• Fortnightly Tax Table: Commonly used by medium-sized businesses with full-time employees, like construction firms or professional services offices. This aligns with standard award conditions and helps in budgeting, as seen in a marketing agency paying graphic designers $2,000 every two weeks, simplifying withholding calculations for stable workforces.
• Monthly Tax Table: Suitable for executive roles or salaried positions in sectors like finance or consulting, where payments are less frequent. A medium business in IT might pay project managers $6,000 monthly, using this table to handle higher earnings brackets efficiently and reduce administrative overhead from weekly processing.

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Choosing the right table based on your pay cycle ensures accurate withholding and supports Single Touch Payroll reporting, mandatory for all businesses.

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Updates for the 2025-26 Tax Year

For the 2025-26 tax year (1 July 2025 to 30 June 2026), there are no changes to the regular weekly, fortnightly, and monthly tax tables compared to the previous year. The ATO has confirmed that these tables continue to apply without updates, although some adjustments were made to study and training support loan components and back payment treatments. Income tax cuts reducing the 16% rate to 15% are scheduled to begin from 1 July 2026, so they do not affect withholding in 2025-26.

Businesses should note that if an employee has not provided a valid Tax File Number (TFN), withholding is at 47% for residents or 45% for foreign residents, ignoring cents.

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How to Use the Tax Tables

To use the tax tables:

1. Determine the employee's gross earnings for the pay period, including allowances but ignoring cents.
2. Check if the employee claims the tax-free threshold (typically yes for primary jobs).
3. Look up the earnings in the relevant table column to find the withholding amount.
4. Adjust for any tax offsets or Medicare levy variations if declared.
5. Add extra withholding for study loans if applicable.

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.

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.

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Weekly Tax Table

The weekly tax table is for businesses paying employees every week. It scales the annual tax rates to a 52-week year. Earnings below approximately $350 per week (the weekly equivalent of the $18,200 tax-free threshold) generally have nil withholding if the threshold is claimed. Refer to the ATO's Weekly tax table available on their website at  for the full schedule.

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Fortnightly Tax Table

For fortnightly payments (every two weeks), this table assumes 26 pays per year. It's suitable for many small businesses with bi-weekly cycles. Refer to the ATO's Fortnightly tax table available on their website at  for the full schedule.

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Monthly Tax Table

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 available on their website at for the full schedule.

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Q&A

What if my employee has a study or training loan debt?

Add the study loan component from separate ATO tables. For example, for $2,900 fortnightly earnings, the component is $88 if debt applies.

How do I handle foreign resident employees?

Use foreign resident rates: 32.5% up to $135,000 annually, higher above. Withhold 45% if no TFN provided.

What is the tax-free threshold?

It's $18,200 annually. Employees claim it on their TFN declaration for primary jobs to reduce withholding.

When should I use the Medicare levy adjustment?

If employees qualify for reductions (e.g., low income with dependants), use adjustment tables to lower withholding.

How often are tax tables updated?

Annually, but for 2025-26, regular tables remain unchanged from 2024-25.

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Scale Suite Services for Payroll and Tax Compliance

If you're searching for ways to simplify PAYG withholding calculations for your Australian small or medium business, Scale Suite offers integrated payroll solutions that automatically apply the latest ATO tax tables.

Our services help with compliance, including Single Touch Payroll reporting and superannuation management, ensuring accurate withholding without manual lookups.