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Examples
Example One
How to deduct the full amount of child support
The employer is asked to deduct $75.00 in child support each week.
| Gross weekly pay | $450.00 |
| Tax withheld | $73.00 |
| Set aside protected earnings amount (2007) | $284.85 |
| Pay remaining | $92.15 |
| Deducted child support (send this amount to CSA with a payment advice slip) |
$75.00 |
| Pay remaining | $17.15 |
| Plus protected earnings amount (2007) | $284.85 |
| Net pay to employee | $302.00 |
Other deductions such as superannuation and loan repayments can now be made from this amount.
Example Two
How the PEA can affect the deduction of child support
The employer is asked to deduct $75.00 in child support each week.
| Gross weekly pay | $350.00 |
| Tax withheld | $46.00 |
| Set aside protected earnings amount (2007) | $284.85 |
| Pay remaining | $19.15 |
| Deducted child support (Pay this amount to Child Support Agency) |
$19.15 |
| Pay remaining | $0.00 |
| Plus protected earnings amount | $284.85 |
| Net pay to employee | 284.85 |
The employer cannot deduct the full amount of the child support of $75.00 as it would leave the employee with less than the PEA.
The employer must deduct the child support ($19.15) and send it to CSA with a payment advice slip and a Variations to Child Support Deductions form or by reporting the variations on CSAonline.
Example Three
How to deduct child support from annual leave payments
The employee goes on paid holiday leave on the last payday in the month and the pay he/she receives includes advance payment for the next two weeks. The employee is paid $375.00 weekly.
The employer is asked to deduct $30.00 in child support each week.
| Total pay received | $1125.00 |
| Tax withheld (for 3 weekly payments) |
$153.00 |
| Set aside protected earnings amount 3 x $284.85 (2007) |
$854.55 |
| Pay remaining | $117.45 |
| Deducted child support (3 x $30.00) |
$90.00 |
| Pay remaining | $27.45 |
| Plus protected earnings amount | $854.55 |
| Net pay to employee | $882.00 |
Child support must be deducted from the advance payment of wages or salary.
The employer deducts $90.00 and forwards that amount to CSA on or before the seventh day of the following month. That is, $30.00 for the current pay week and $60.00 for the two weeks that are paid in advance. The employer should send the deductions (and a payment advice slip) to CSA with a Variations to Child Support Deductions form or by reporting the variations using CSAonline.
Example Four
How to make deductions of child support from a casual or part-time employee's
pay
The employee works part-time and earns $400.00 a fortnight.
The employer is asked to deduct $40.00 in child support each fortnight.
| Gross fortnightly pay | $400.00 |
| Tax withheld | $30.00 |
| Set aside protected earnings amount (2007) | $569.70 |
| Pay remaining | $0.00 |
| Net pay to employee | $370.00 |
No child support can be deducted from the employee's pay as it falls below the PEA. However, tax-withheld amounts are still deducted at the required rate.
As no child support was deducted, the employer should send a Variations to Child Support Deductions form or report the variations using CSAonline.
Example Five
How to deduct child support and apply PEA when there is a salary sacrifice
arrangement in place
The employee has a remuneration package valued at $2600.00 per fortnight.
One thousand, seven hundred dollars ($1700.00) of this is salary sacrificed payments for the employee's mortgage, car lease, health insurance, and school fees.
The employer is asked to deduct $398.00 in child support each fortnight.
| Gross fortnightly remuneration | $2600.00 |
| Salary package | $1700.00 |
| Tax withheld | $126.00 |
| Pay remaining | $774.00 |
| Set aside PEA (2007) | $569.70 |
| Pay remaining | $204.30 |
| Deducted child support | $204.30 |
| Pay remaining | $0.00 |
| Plus PEA | $569.70 |
| Net pay to employee | $569.70 |
The employer cannot deduct the full amount of child support ($398.00) as it would leave the employee with less than the PEA.
The employer must deduct the child support ($204.30) and send it to CSA with a payment advice slip and a Variations to Child Support Deductions form or by reporting the variations using CSAonline.
NOTE: A salary sacrifice remuneration package involving mortgage repayments is different to the situation where the employee asks their pay officer to deduct and pay their loan repayments from their regular pay. Where there is no formal salary packaging arrangement the child support should be deducted after tax instalments but before making the loan repayments as mentioned in Example One.
Deducting from other payments
(Deducting under a Section 72A Notice)
Example Six
How to make deductions when you receive a Notice Pursuant to Section 72A to
deduct a cents in the dollar amount.
The contractor is paid $450.00 for work done.
The Section 72A Notice requires you to deduct 15 cents in the dollar.
| Total payment | $450.00 |
| Deducted child support ($450.00 x $0.15) |
$67.50 |
| Pay remaining | $382.50 |
Note: Tax deductions and child support are to be deducted from the gross amount.
PEA does not apply for employees where notices pursuant to Section 72A have been issued. The deducted amount must be paid to CSA within seven days of making the deductions.
Example Seven
How to make deductions when you receive a Notice Pursuant to Section 72A to
deduct a periodic amount
The contractor usually receives payments of between $300.00 and $500.00 each week for work done.
The Section 72A Notice requires you to deduct $110.00 per week.
| In the first week the contractor earns | $500.00 |
| In the second week the contractor earns | $450.00 |
| In the third week the contractor earns | $90.00 |
| Week 1 | |
|---|---|
| Total payment | $500.00 |
| Deducted child support | $110.00 |
| Pay remaining | $390.00 |
| Week 2 | |
|---|---|
| Total payment | $450.00 |
| Deducted child support | $110.00 |
| Pay remaining | $340.00 |
| Week 3 | |
|---|---|
| Total payment | $90.00 |
| Deducted child support | $90.00* |
| Pay remaining | $0.00 |
*You are unable to deduct the full $110.00. You can only deduct what is paid.
PEA does not apply to amounts deducted under Section 72A Notice.
Example Eight
How to make deductions when you receive a Notice Pursuant to Section 72A to
deduct a lump sum from an employee's termination payment.
The employee's weekly salary is $600.00. The employee resigns and is owed five weeks in unpaid annual leave.
CSA sends a Section 72A Notice for a lump sum amount $962.00.
| Total annual leave payment | $3000.00 |
| Tax instalments deducted (5 x $110.00) |
$550.00 |
| Child support deducted | $962.00 |
| Pay remaining | $1488.00 |
The deducted amount must be paid to CSA within seven days of making the deductions.
Protected earnings amount figures
| Year | Per week | Per fortnight | Per month |
|---|---|---|---|
| 2008 | $290.85 | $581.70 | $1,264.68 |
| 2007 | $284.85 | $569.70 | $1,238.59 |
| 2006 | $273.75 | $547.50 | $1,189.51 |
| 2005 | $267.00 | $534.00 | $1,160.97 |
| 2004 | $260.48 | $520.96 | $1,132.62 |
| 2003 | $253.58 | $507.16 | $1,102.62 |
Use the employer calculator to automatically work out your deductions.
