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How much child support to deduct
Our notice includes a schedule of deductions which tells you how much child support to deduct. You must not change the deduction amount 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’ll 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.
If your employee or contractor have any questions, they can call us on the Child Support information for employers line. We’ll give them advice based on their situation.
When you get more than one notice
You may get more than one notice from a Government authority asking you to make deductions. This could be separate notices from Child Support, Centrelink or another government authority. Generally, you should comply with each notice as you get them.
However, if you get a notice from Child Support and a court order from a Commonwealth, state or territory court, the Child Support notice will take priority over the court order.
If you get more than one notice and you don’t know what to do, call us on the Child Support enquiry line. You’ll need your reference number or Australian Business Number (ABN) ready to quote.
What you don’t deduct
You don’t deduct the Protected Earnings Amount (PEA). Legislation protects part of your employee or contractor’s wages from child support deductions. This is so they have money for living expenses.
Find out about the current Protected Earnings Amount when deducting child support.
How to deduct child support
Before you start
You’ll need to check the pay day in the notice we send you is correct. If it’s not, you’ll need to call us on the Child Support information for employers line so we can update our systems to match your pay cycle.
If you report using Single Touch Payroll, the details in your software must also be correct.
It’s important you fix any details that are wrong before making a deduction. You must check all of the following:
- your employees’ pay frequency is correct, for example weekly, fortnightly or monthly
- your employees’ pay day, is set to the day you deposit their pay into to their bank account
- the start and end date for the pay period.
If you need help with this, you’ll need to check with your software provider.
Make the deduction
For each person, you must do all of the following:
- check the schedule for the amount you need to deduct
- make tax withheld deductions from their wages
- make formal salary sacrifice deductions from their wages
- set aside the PEA
- 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.
Examples of how to calculate deductions
Example 1 - basic deduction
You need to deduct $75.00 in child support each week from Joseph’s pay.
The calculation is:
| Step | Amount | Total |
|---|---|---|
| Gross weekly pay | Â | $700.00 |
| Minus tax withheld amount each week | $36.00 | $664.00 |
| Set aside the PEA | $514.50 | $149.50 |
| Deduct child support | $75.00 | $74.50 |
| Add PEA | $514.50 | $589.00 |
Joseph’s net weekly pay is $589.00.
Refer to the Australian Taxation Office for tax 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 $589.00 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 need to deduct $75.00 in child support each week from Ellie’s pay.
The calculation is:
| Step | Amount | Total |
|---|---|---|
| Gross weekly pay | Â | $600.00 |
| Minus tax withheld amount each week | $21.00 | $579.00 |
| Set aside the PEA | $514.50 | $64.50 |
| Deduct child support | $64.50, as deducting $75.00 would leave Ellie with less than the PEA of $514.50 | $0.00 |
| Add PEA | $514.50 | $514.50 |
Ellie’s net weekly pay is $514.50.
Refer to the Australian Taxation Office for tax 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 $64.50 to us by the 7th day of the next month. You’ll need to let us know the reason for the variation.
Example 3 - deductions during paid periods of leave
You need 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 get his payment in advance with this week’s pay.
The calculation is:
| Step | Amount | Total |
|---|---|---|
| Total pay received | Â | $1,660.00 |
| Tax withheld for 3 weekly payments | $39.00 | $1,621.00 |
| Weekly PEA x 3 ($514.50 x 3) | $1,543.50 | $77.50 |
| Deduct child support (3 x $20) | $60.00 | $17.50 |
| Plus PEA | $1,543.50 | $1,561.00 |
Ben’s net pay is $1,561.00.
Refer to the Australian Taxation Office for tax rates applicable to your employee. Tax amounts are examples only.
In this case, you’ll need 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 received his annual or long service leave payment 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.
You can use STP to tell us if you can process each period individually. If you can’t you’ll need to use either of the following options.
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 need to deduct $40.00 in child support each fortnight from Johanna’s pay.
The calculation is:
| Step | Amount | Total |
|---|---|---|
| Gross fortnightly pay | Â | $498.00 |
| Minus tax withheld amount each fortnight | $0.00 | $498.00 |
| Set aside the PEA available (2024 fortnightly rate $1029.00) | $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 tax 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 need 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 $2,300.00 per fortnight. Susan salary sacrifices $900.00 of the $2,300.00 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 | Â | $2,300.00 |
| Less salary sacrifice | $900.00 | $1,400.00 |
| Less tax withheld | $96.00 | $1,304.00 |
| Set aside the PEA of $1,029.00 per fortnight | $1029.00 | $275.00 |
| Deduct child support | $275.00 | $0.00 |
| Plus PEA | $1029.00 | $1029.00 |
| Net pay to Susan | Â | $1029.00 |
Refer to the Australian Taxation Office for tax 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 $1029.00 for that fortnightly pay. Instead, you must deduct the amount of $275.00 and pay it to us.
If you report child support deductions through STP, you should report the amount you deduct even though it’s less than what we’ve asked for. For this specific example, you don’t need to do anything else to report the variation 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 making other deductions. Examples of other deductions are health fund payments or social club fees.
When to pay the deductions to us
You can make payments to us at the end of each pay period. This can be weekly, fortnightly or monthly.
You must pay the deductions to us by the 7th day of the next month. The back of your notice will explain how you can do this.
If you’re deducting child support from more than one person’s wage, you can pay us all the deductions together.
How to pay the deductions to us
We have 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. You’ll need to take into account all of these:
- child support payments
- the PEA
- basic tax liability.