A small business owner out in Wagga Wagga once asked her bookkeeper a question. Why was fortnightly pay for her staff not simply double the weekly figure. Either way, it was a fair question. Tax tables do not just double up cleanly. That trips up plenty of employers, not just employees. Understanding how a tax table actually works clears up a lot of confusion at payslip time.
Here is the short version. A tax table is a schedule the ATO publishes. It shows how much tax an employer should withhold from a pay packet. Separate tables exist for weekly, fortnightly and monthly pay cycles. Each one is built around its own pay period, not just a multiple of the others.
Getting this right matters for both sides. If you run payroll, having a tax agent check your withholding setup avoids underpaying tax across the year. It also saves your staff from a surprise bill down the track.
What is a tax table
A tax table sets out how much tax to withhold from an employee. It looks at their pay and how often they get paid. In practice, employers use these tables every pay run. Software usually applies them automatically, but the table itself is what decides the number.
Weekly, fortnightly and monthly tax tables explained
Each pay cycle gets its own table, since a year does not divide evenly into any of them. A weekly table assumes fifty two pay periods. Fortnightly tables assume twenty six. Monthly tables assume twelve. As a result, none of these line up perfectly with a financial year. That is exactly why the tables are built separately, rather than scaled up or down from one another.
How employers use tax tables to withhold tax
Payroll software looks up the relevant table for each employee. It checks their pay cycle and how much they earn that period. Then it withholds the matching amount and sends it to the ATO on the employee’s behalf. Over the year, this builds toward roughly the right total tax, assuming nothing else changes along the way.
Why fortnightly withholding is not simply double weekly
This is where the Wagga Wagga business owner’s question comes in. You might expect a fortnightly table to just double every figure on the weekly one. It does not work that way. The tables are built around twenty six periods, not fifty two doubled. So small rounding differences creep in. Over a full year, these differences even out. Within any single pay, though, they can look slightly off if you try the maths yourself instead of reading the table directly.
Checking your own payslip against the table
If you want to check your own pay, start with your gross amount for that period. First, match your pay cycle to the right table, whether that is weekly, fortnightly or monthly. Next, look up the withholding amount for your income level. Keep in mind that a simple lookup will not capture HECS debt, salary sacrifice, or extra allowances, so treat it as a starting point rather than the final word on your payslip.
Why your pay might not match the table exactly
Plenty of people check a tax table, then wonder why their actual payslip shows a different number. A few things usually explain the gap. HECS or HELP debt repayments get added on top once your income crosses the threshold. Salary sacrifice, such as extra superannuation, can lower your taxable pay before the table even applies. On top of that, allowances, bonuses, and irregular hours can push a single pay higher or lower than usual.
A cafe in Dubbo ran into this during a busy trading period. A staff member picked up extra shifts one fortnight. She assumed the tax table had been applied incorrectly, since the amount withheld jumped more than expected. In reality, the higher pay for that period pushed part of it into a different withholding bracket within the table. That is exactly how the system is meant to work.
What happens if an employer uses the wrong table
Using the wrong table, such as a weekly rate on a fortnightly pay run, usually means too little or too much tax gets withheld. Either way, it tends to sort itself out at tax time. The final return is based on total income and total tax withheld, not any single pay period. Even so, catching the error early saves an unpleasant surprise later. It is worth double checking payroll settings whenever pay frequency changes for any staff member.
How a second job affects your tax table result
Tax tables assume each employer is your only source of income. Once you add a second job, that assumption breaks down. Your main employer withholds tax as though that job is your only income, using the standard table with the tax free threshold built in. Your second employer, on the other hand, usually withholds at a flat higher rate, since no threshold applies there. Neither employer can see the other’s numbers, so the tables cannot account for your combined income. Even so, this is not a fault in the tables themselves. It is simply a gap that only shows up once your return is lodged and everything gets added together.
Where to find the current tax tables
Tax tables get updated whenever rates or thresholds change. A table from a previous year should not be used going forward. Rather than list specific figures here that could go stale, the safest approach is to pull the current tables straight from the ATO website whenever you need them. That way, you are always working from the version that actually applies right now.
If payroll is not your strong suit, or you would rather hand the whole thing over, a tax agent can set up and check your withholding. This makes sure the tables get applied correctly every single pay run. On top of that, it takes the guesswork out of things like second jobs and overtime, which is exactly where most confusion starts. For a hand with getting this sorted properly, get in touch and we will take it from here.
Frequently asked questions
How is fortnightly tax different from weekly
A fortnightly tax table is built around twenty six pay periods a year, not simply double the weekly table. Small rounding differences mean the two do not always match exactly, even though they even out over a full year.
Do tax tables include HECS repayments
Not by default. HECS or HELP repayments get calculated separately. They get added on top of the standard tax table amount once your income for that period crosses the relevant threshold.
What happens if my employer uses the wrong tax table
Too much or too little tax may get withheld across the year. This usually corrects itself once your tax return is lodged, since the final calculation is based on your total income and total tax withheld for the year.
Are tax tables the same as tax brackets
They are related but not identical. Tax brackets set the actual tax rates for the year. Tax tables, on the other hand, translate those rates into a per pay period withholding amount, based on how often you get paid.
What tax table applies to casual employees
The same tables apply, based on how often a casual employee actually gets paid rather than their employment type. So a casual paid weekly uses the weekly table, just like a permanent employee on the same pay cycle.
Do self employed people use a tax table
Not in the same way. Self employed people generally pay tax through instalments or at tax time, rather than having an employer withhold anything from a pay table. Even so, understanding how the tables work can help estimate what to set aside. Instead, most sole traders rely on quarterly instalments to spread the load across the year.
Do tax tables account for overtime
Yes, in a sense. Overtime simply adds to your gross pay for that period, which then gets matched against the table like any other income. Because of this, a big overtime week can temporarily push more of your pay into a higher withholding amount, even if your average pay stays the same across the year. So a bumper fortnight is not a mistake, just the table doing exactly what it is designed to do.
Can I ask my employer which tax table they use
Absolutely. Most payroll systems record this as part of your employee setup. If something about your pay looks off, asking which table and pay cycle your employer has on file is a reasonable first step before assuming an error. After all, a quick conversation with payroll often clears things up faster than trying to work it out alone. Meanwhile, keep a copy of your payslips, since they make any follow up conversation much easier.
Where can I find the current ATO tax table
The ATO publishes current weekly, fortnightly and monthly tax tables directly on its website. Since these get updated when rates change, it is worth pulling the table fresh each time rather than reusing an old copy. Either way, a quick check only takes a minute and saves any doubt later.