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First Home Super Savers Scheme

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 After a determination and request of funds, why would a withholding tax apply? And is the amount shown on the determination subject to this tax or has it already been taken off? 

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Hi @Crunchtime

 

Thanks for your question.

 

As you have probably read on our website, you are required to submit a first home super saver (FHSS) determination request before submitting a FHSS release request. When you submit a FHSS determination request, the resulting determination will display:

  • The date of determination
  • 85% of your concessional contributions
  • 100% of your non-concessional contributions
  • The total associated earnings
  • The estimated maximum withholding tax, and
  • Your maximum release amount

 

The displayed estimated maximum withholding tax is the estimated tax that will be applied to your concessional contributions and total associated earnings. It is calculated at 17% (top marginal tax rate plus Medicare levy minus 30% tax offset).

 

The tax isn’t applied to your non-concessional contributions because they are tax free. Your concessional contributions and associated earnings are subject to tax because they will need to be declared on your tax return.

 

The maximum release amount includes 85% of your concessional contributions, 100% of your non-concessional contributions and the total associated earnings. This amount hasn't been reduced by the estimated maximum withholding tax.

 

The actual withholding rate won’t be calculated until you submit the FHSS release request. This rate is based on your estimated tax rate plus Medicare levy minus the 30% offset.

 

For example, if your estimated marginal tax rate was 37%, the withholding rate would be 9%. This is based on a calculation of 37% plus 2% (Medicare levy) minus 30% (offset).

 

After submitting a FHSS determination request, you can then submit a FHSS release request. In most cases, it will take between 15 and 25 business days for your fund (or funds) to release your money and for us to pay it to you.

 

A payment summary will be sent to you at the end of the financial year. It will show the tax that we have withheld from the payment as well as the assessable FHSS released amount (concessional contributions plus the total associated earnings).

 

You must include the assessable FHSS released amount shown on your payment summary as assessable income in your tax return for the year you request the release. The tax withheld amount should also be included.

 

If you use myTax to submit your tax return, have a look at the myTax 2019 First home super saver (FHSS) scheme page on our website for further instruction. 24 Other income 2019 will assist if you are lodging a paper return.

 

For more information about the FHSS determination and release request as well as the tax requirements, check out the applying to release your savings section of the FHSS scheme page on our website.

 

Hope this helps.

 

Thanks,

 

ChrisR

1 REPLY 1
Highlighted

Best answer

ATO Certified

Community Support

Replies 0

Hi @Crunchtime

 

Thanks for your question.

 

As you have probably read on our website, you are required to submit a first home super saver (FHSS) determination request before submitting a FHSS release request. When you submit a FHSS determination request, the resulting determination will display:

  • The date of determination
  • 85% of your concessional contributions
  • 100% of your non-concessional contributions
  • The total associated earnings
  • The estimated maximum withholding tax, and
  • Your maximum release amount

 

The displayed estimated maximum withholding tax is the estimated tax that will be applied to your concessional contributions and total associated earnings. It is calculated at 17% (top marginal tax rate plus Medicare levy minus 30% tax offset).

 

The tax isn’t applied to your non-concessional contributions because they are tax free. Your concessional contributions and associated earnings are subject to tax because they will need to be declared on your tax return.

 

The maximum release amount includes 85% of your concessional contributions, 100% of your non-concessional contributions and the total associated earnings. This amount hasn't been reduced by the estimated maximum withholding tax.

 

The actual withholding rate won’t be calculated until you submit the FHSS release request. This rate is based on your estimated tax rate plus Medicare levy minus the 30% offset.

 

For example, if your estimated marginal tax rate was 37%, the withholding rate would be 9%. This is based on a calculation of 37% plus 2% (Medicare levy) minus 30% (offset).

 

After submitting a FHSS determination request, you can then submit a FHSS release request. In most cases, it will take between 15 and 25 business days for your fund (or funds) to release your money and for us to pay it to you.

 

A payment summary will be sent to you at the end of the financial year. It will show the tax that we have withheld from the payment as well as the assessable FHSS released amount (concessional contributions plus the total associated earnings).

 

You must include the assessable FHSS released amount shown on your payment summary as assessable income in your tax return for the year you request the release. The tax withheld amount should also be included.

 

If you use myTax to submit your tax return, have a look at the myTax 2019 First home super saver (FHSS) scheme page on our website for further instruction. 24 Other income 2019 will assist if you are lodging a paper return.

 

For more information about the FHSS determination and release request as well as the tax requirements, check out the applying to release your savings section of the FHSS scheme page on our website.

 

Hope this helps.

 

Thanks,

 

ChrisR