Explanation of Tax Scales

The correct tax scale that must be applied to a payee depends on a number of factors such as whether the payee:

has provided a signed Tax File Number (TFN) Declaration
has provided a tax file number (TFN)
is an Australian resident for tax purposes
is subject to special rates of withholding
is subject to a Medicare levy exemption
is subject to a withholding variation.

The table below lists and describes the tax scales that are available in FastTrack360 and which types of payees each tax scale applies depending on the conditions that apply.

Tax Scale	Applies To Payees Who…

Tax Scale	Applies To Payees Who…
Tax Scale 1 - No Tax-Free Threshold Claimed	Provide a tax file number (or indicate that they will provide one within 28 days of commencing employment). Have indicated the following based on answers on their Tax File Number Declaration: they are an Australian resident for tax purposes they are not claiming the tax-free threshold. This tax scale is automatically defaulted to tax scale 4a if a TFN is not provided within 28 days of the employment start date.
Tax Scale 2 - Tax-Free Threshold Claimed	Provide a tax file number (or indicate that they will provide one within 28 days of commencing employment). Have indicated the following based on answers on their Tax File Number Declaration: they are an Australian resident for tax purposes they are claiming the tax-free threshold. This tax scale is automatically defaulted to tax scale 4a if a TFN is not provided within 28 days of the employment start date.
Tax Scale 3 - Foreign Resident	Provide a tax file number (or indicate that they will provide one within 28 days of commencing employment). Have indicated on their Tax File Number Declaration that they are either: not an Australian resident for tax purposes are in Australia on a working holiday maker visa (for more information, see Employing Working Holiday Makers). This tax scale is automatically defaulted to tax scale 4b if a TFN is not provided within 28 days of the employment start date.
Tax Scale 4a - TFN Not Provided - Resident	Are Australian residents for tax purposes. Have not provided a TFN within 28 days of commencing employment.
Tax Scale 4b - TFN Not Provided - Foreign Resident	Are not Australian residents for tax purposes or are working in Australia under a working holiday maker visa. Have not provided a TFN within 28 days of commencing employment.
Tax Scale 5 - Full Exemption from Medicare Levy Claimed	Provide a tax file number (or indicate that they will provide one within 28 days of commencing employment). Have indicated the following based on answers on their Tax File Number Declaration: they are an Australian resident for tax purposes they are claiming the tax-free threshold. Provide a Medicare Levy Variation Declaration claiming a full exemption from the Medicare levy.
Tax Scale 6 - Half Exemption from Medicare Levy Claimed	Provide a tax file number (or indicate that they will provide one within 28 days of commencing employment). Have indicated the following based on answers on their Tax File Number Declaration: they are an Australian resident for tax purposes they are claiming the tax-free threshold. Provide a Medicare Levy Variation Declaration claiming a half exemption from the Medicare levy.
Variation - Approved Withholding Variation Percentage	Provide a Withholding Variation Declaration claiming a downward variation to their rate of withholding OR; Are subject to Horticulturalists and Shears tax rates OR; Are working in Australia under the Seasonal Worker Programme.