Notice to Commence Child Support Deductions

If you get a notice for one of your employees, you’re required under law to comply.

How much child support to deduct

Our notice includes a schedule of deductions that tells you how much child support to deduct. You must not change the deduction amount listed in the schedule.

You can’t change the deduction even if your employee or contractor, their lawyer or anyone else, asks you to. You can only change it if we tell you in writing, or if the Protected Earnings Amount (PEA) applies.

Once you make a deduction from your employee or contractor’s pay, you have legal obligations to send us any deductions you make. If you don’t meet your legal obligations, we can impose penalties.

You can pay these deductions using a range of payment options.

Your employee or contractor can call us on the Child Support information line if they have any questions. We’ll give them advice based on their situation.

What you don't deduct

You don’t deduct the PEA. Legislation protects part of your employee or contractor’s wages from child support deductions. This is so they have money for living expenses.

To find out the current Protected Earnings Amount when deducting child support.

How to deduct child support

For each person do all of the following:

  1. check the schedule for the amount you need to deduct
  2. make tax withheld deductions from their wages
  3. make formal salary sacrifice deductions from their wages
  4. set aside the PEA
  5. deduct the child support or as much of the specified amount as possible.

Make sure you deduct child support before other deductions for all of these:

  • voluntary superannuation
  • health fund repayments
  • loan repayments.

Make sure you include the details on the person’s pay slip.

You can then pay the person the remaining pay and the PEA or make other deductions from it.

You can make payments to us at the end of each pay period. For example, weekly, fortnightly or monthly. You must pay the deductions to us by the 7th day of the next month. There is information on the back of your notice to explain how to do this.

If you’re deducting child support from more than one person’s wage, you can pay us all the deductions together.

If you’re not using Single Touch Payroll (STP) or reporting using Child Support Business Online Services you need to give us both of these:

  • the total of all the deductions
  • any deduction variations.

To do this complete the Child Support deductions report for employers’ information and contact the Child Support employer service team to let us know.

We’ll contact you if we need variation information for deductions reported through STP.

We have a range of payment options for you to send us child support payments.

Use the Child Support employer calculator to work out your employees’ or contractors’ net pay, taking into account all of these:

  • child support payments
  • the PEA
  • basic tax liability.

Getting more than one notice

You may get more than one notice asking you to make deductions. This could be separate notices from Child Support, Centrelink or another government authority. You should comply with the notices in the order you get them.

If you get more than one notice asking you to deduct, you must deduct Child Support amounts first, before amounts requested by other notices.

Call us on the Child Support enquiry line if you don’t know what to do if you get more than one notice. Have your reference number or ABN ready to quote, when you call us.

Examples of how to calculate deductions

Example 1 - basic deduction

You've been asked to deduct $75.00 in child support each week from Joseph’s pay.

The calculation is:

Step Amount Total
Gross weekly pay   $600.00
Minus tax withheld amount each week $36.00 $564.00
Set aside the PEA $429.98 $134.02
Deduct child support $75.00 $59.02
Add PEA $429.98 $489.00

Joseph’s net weekly pay is $489.00.

Refer to the Australian Taxation Office for rates applicable to your employee. Tax amounts are examples only.

Other voluntary deductions such as Joseph’s self-contribution to superannuation and loan repayments can come from his $489.00 pay.

You must send Joseph’s deduction of $75.00 to us by the 7th day of the next month. For example, Joseph’s payday is 4 August. You should deduct and send the payment to us by 7 September. You can send the deductions to us at the end of each pay period if it’s easier for you. We must get the full amount by the 7th of each month.

If Joseph’s employment ends, you only need to make one deduction for the last pay period you employed him. This is because deductions are specific to that period. You don’t need to deduct beyond the amount requested for that pay period or pay date.

If you terminate one of your contractors or an employee who pays child support, you must notify us. This also applies if they resign from your business. You should do this before you make their final payment.

Example 2 - unable to deduct full amount because of PEA

You've been asked to deduct $75.00 in child support each week from Ellie's pay.

The calculation is:

Step Amount Total
Gross weekly pay   $460.00
Minus tax withheld amount each week $11.00 $449.00
Set aside the PEA $429.98 $19.02
Deduct child support $19.02, as deducting $75.00 would leave Ellie with less than the PEA of $429.98 $0.00
Add PEA $429.98 $429.98

Ellie’s net weekly pay is $429.98

Refer to the Australian Taxation Office for rates applicable to your employee. Tax amounts are examples only.

In this case, you can't deduct the full amount because it would leave Ellie with less than the PEA.

You must send the varied employer deduction amount of $19.02 to us by the 7th day of the next month. You’ll need to let us know the reason for the variation.

If you’re registered for Child Support Business Online Services you can report the variation online.

If you aren’t registered, complete the Child Support deductions report for employers form, and contact the Child Support employer service team to let us know.

If you report using STP we’ll contact you if we need variation information.

Example 3 - deductions during paid periods of leave

You've been asked to deduct $20.00 in child support each week from Ben's pay.

Ben is going on paid holiday leave for 2 weeks. He's arranged to be paid in advance with this week’s pay.

The calculation is:

Step Amount Total
Total pay received   $1,460.00
Tax withheld for 3 weekly payments $39.00 $1,421.00
Weekly PEA x 3 ($383.10 x 3) $1,289.94 $131.06
Deduct child support (3 x $20) $60.00 $71.06
Plus PEA $1,289.94 $1,361.00

Ben’s net pay is $1,361.00

Refer to the Australian Taxation Office for rates applicable to your employee. Tax amounts are examples only.

In this case, you're required to deduct $60.00 from Ben’s pay and notify us of the variation.

If Ben was cashing out leave, you don’t need to deduct beyond the amount requested for that pay period or pay date. This is because deductions are specific to that period.

If Ben got paid his annual or long service leave in advance, you would also take out child support deductions. You would take the deduction from his advance leave payments for each specific pay period or pay date.

If Ben was taking leave without pay, you must notify us of the period he intends to take this leave.

If you’re registered with Child Support Business Online Services, you can send this information to us online.

If you aren’t registered, complete the Child Support deductions report for employers form, and contact the Child Support employer service team to let us know.

Example 4 - deductions for a part time employee

You've been asked to deduct $40.00 in child support each fortnight from Johanna's pay.

The calculation is:

Step Amount Total
Gross fortnightly pay   $498.00
Minus tax withheld amount each fortnight $0.00 $498.00
Set aside the PEA available (2022 fortnightly rate $859.96) $498.00 $0.00
Deduct child support $0.00 as there is not the $40.00 requested available to deduct after PEA
Add PEA available $498.00 $498.00

Johanna’s net fortnightly pay is $498.00.

Refer to the Australian Taxation Office for rates applicable to your employee. Tax amounts are examples only.

In this case, you can't make the employer deduction because Johanna’s net pay falls below the PEA. You are required to notify us of the variation.

Example 5 - deductions under a salary sacrifice arrangement

A salary sacrifice arrangement is when an employee agrees to give up part of their salary or wages. Employees give these up in return for employer provided benefits of a similar value.

Susan has a remuneration package valued at $2,000.00 per fortnight. Susan salary sacrifices $900.00 of the $2,000.00 for all of the following:

  • mortgage
  • car lease
  • health insurance
  • school fees.

You've been asked to deduct $398.00 in child support each fortnight from Susan's pay.

The calculation is:

Step Amount Total
Gross fortnightly pay   $2000.00
Less salary sacrifice $900.00 $1,100.00
Less tax withheld $96.00 $1,004.00
Set aside the PEA of $766.20 per fortnight $859.96 $144.04
Deduct child support $144.04 $0.00
Plus PEA $859.96 $859.96
Net pay to Susan   $859.96

Refer to the Australian Taxation Office for rates applicable to your employee. Tax amounts are examples only.

In this case, the full amount of $398.00 can't be deducted. This is because it would leave Susan with less than the PEA of $859.96 for that fortnightly pay. Instead, you must deduct the amount of $144.04 and pay it to us.

If you’re registered with Child Support Business Online Services, you must tell us the reason for the variation online.

If you aren’t registered, complete the Child Support deductions report for employers form, and contact the Child Support employer service team to let us know.

As you're unable to deduct the full $398.00 in child support, we would contact Susan directly to arrange for payment of the outstanding amount.

If a salary sacrificing arrangement is in place, an employee’s obligations in relation to child support deductions remain. You must continue to deduct the requested amount of child support. However, you must not leave less than the PEA in your employee or contractor’s pay.

If your employee doesn’t have a formal salary packaging arrangement you need to deduct child support from an employee’s pay before deducting after tax deductions. Examples of after tax deductions are health fund payments or social club fees.

Page last updated: 6 January 2022