Schedule 5 Calculator — Tax Withheld From Your Bonus
Enter your regular pay and the additional payment to see the withholding your payroll should apply under the 2026-27 rates, along with the ATO's 47% cap on the amount.
Withholding on your bonus
Want the full breakdown including super? Use the bonus tax calculator
Full bonus breakdown
See your bonus after tax alongside annual income, Medicare, and super effects.
Bonus tax calculator Back pay calculatorSchedule 5 Ready Reckoner 2026-27
The table below applies the Schedule 5 apportionment to a worker earning $2,000 a fortnight ($52,000 a year) who claims the tax-free threshold and has no study loan. Read it as a guide to the shape of the result: the effective rate stays close to the employee's marginal rate rather than spiking, which is the whole purpose of the schedule.
| Bonus / back payment | Apportioned per fortnight | Tax withheld | Effective rate | In your pocket |
|---|---|---|---|---|
| $500 | $19 | $156 | 31.2% | $344 |
| $1,000 | $38 | $312 | 31.2% | $688 |
| $1,500 | $57 | $468 | 31.2% | $1,032 |
| $2,000 | $76 | $624 | 31.2% | $1,376 |
| $2,500 | $96 | $780 | 31.2% | $1,720 |
| $3,000 | $115 | $936 | 31.2% | $2,064 |
| $3,500 | $134 | $1,092 | 31.2% | $2,408 |
| $4,000 | $153 | $1,248 | 31.2% | $2,752 |
| $4,500 | $173 | $1,456 | 32.4% | $3,044 |
| $5,000 | $192 | $1,612 | 32.2% | $3,388 |
| $6,000 | $230 | $1,924 | 32.1% | $4,076 |
| $7,000 | $269 | $2,236 | 31.9% | $4,764 |
| $8,000 | $307 | $2,548 | 31.9% | $5,452 |
| $9,000 | $346 | $2,912 | 32.4% | $6,088 |
| $10,000 | $384 | $3,224 | 32.2% | $6,776 |
| $12,000 | $461 | $3,848 | 32.1% | $8,152 |
| $14,000 | $538 | $4,524 | 32.3% | $9,476 |
| $16,000 | $615 | $5,148 | 32.2% | $10,852 |
| $18,000 | $692 | $5,772 | 32.1% | $12,228 |
| $20,000 | $769 | $6,396 | 32.0% | $13,604 |
| $25,000 | $961 | $8,008 | 32.0% | $16,992 |
| $30,000 | $1,153 | $9,620 | 32.1% | $20,380 |
| $35,000 | $1,346 | $11,232 | 32.1% | $23,768 |
| $40,000 | $1,538 | $12,844 | 32.1% | $27,156 |
| $45,000 | $1,730 | $14,404 | 32.0% | $30,596 |
| $50,000 | $1,923 | $16,016 | 32.0% | $33,984 |
| $60,000 | $2,307 | $19,240 | 32.1% | $40,760 |
| $70,000 | $2,692 | $22,412 | 32.0% | $47,588 |
| $85,000 | $3,269 | $27,352 | 32.2% | $57,648 |
| $100,000 | $3,846 | $33,228 | 33.2% | $66,772 |
Every figure is computed at page load from the ATO Schedule 1 coefficients and the Schedule 5 apportionment steps. Change the regular pay, frequency or study loan setting in the calculator above for your own numbers.
What Is PAYG Schedule 5?
Schedule 5 (NAT 3348) is the ATO withholding schedule for "back payments, commissions, bonuses and similar payments" — lump sums paid on top of ordinary wages. Employers cannot simply add a $5,000 bonus to one fortnight's pay and use the fortnightly tax table: doing so would annualise the bonus as if you earned it every fortnight and withhold far too much. Schedule 5 exists to withhold at a rate that reflects the payment's effect on your annual income.
Unlike the weekly, fortnightly and monthly tables, Schedule 5 is not a look-up grid — it is a set of calculation methods that sit on top of whichever regular tax table applies to the payee. That is why the ATO publishes it as web content rather than a printable PDF.
One boundary matters before you start: Schedule 5 applies only where the payment relates to more than one pay period, or to an undefined period. If a commission or bonus relates to a single pay period, it is simply added to that period's earnings and withheld from the ordinary tax table instead.
Method A vs Method B — How Employers Calculate the Withholding
The ATO gives employers two methods, and either is acceptable. Method B is more complex but produces a withholding amount more likely to approximate the payee's actual tax payable. If either method produces a negative result, treat it as nil.
Method A — apportion across the pay periods in the year
Method A can be used for any additional payment, regardless of which financial year it relates to. It apportions the payment over the number of pay periods in a financial year and applies that average to the gross earnings in the current pay period:
- Work out the payee's gross earnings for the current period, excluding additional payments. Ignore cents.
- Find the withholding on that amount in the relevant tax table.
- Add together all additional payments in this period and divide by the number of pay periods in the year (52, 26 or 12). Ignore cents.
- Add the step 3 amount to the step 1 earnings.
- Find the withholding on the step 4 amount.
- Subtract step 2 from step 5.
- Multiply the step 6 difference by the number of pay periods used at step 3.
- Multiply the additional payment by 47%.
- Withhold the lesser of step 7 and step 8, ignoring cents.
A useful variation: if a commission or bonus covers a defined period of less than 12 months, the employer may divide by the number of pay periods the payment actually relates to at step 3, rather than the full year. A commission covering four weeks for a weekly-paid employee can be divided by four instead of 52.
Method B(i) — back pay for specific periods in the current financial year
Method B(i) is for back payments that map onto identifiable earlier pay periods in the current financial year. Rather than averaging, it reconstructs each affected period: work out how much of the back payment belongs to each period, add it to what was actually paid then, look up the withholding on that corrected total, and subtract what was already withheld. Repeat for every affected period and total the differences.
Method B(ii) — payments spread across the whole financial year
Method B(ii) is for back payments relating to a prior financial year, and for any additional payment that does not belong to a single pay period. It averages the additional payments across the pay periods in the year and applies that to your average total earnings for the year to date — not to the current period's earnings, which is the key difference from Method A. It also subtracts any amounts already withheld from earlier Method B(ii) payments in the same year, and is subject to the same 47% cap.
If a back payment spans both the current and a previous financial year, the employer apportions it between the two and applies the relevant method to each part.
Worked example (2026-27): an employee earns $2,000 a fortnight and receives a $5,000 annual bonus. The apportioned slice is $192 per fortnight, the withholding difference is $62 per pay, and total withholding on the bonus is $1,612 — an effective rate of 32.2%, close to the employee's marginal rate rather than the top rate, and comfortably under the 47% cap. Verify your own numbers with our bonus tax calculator.
The 47% Withholding Limit
Under both Method A and Method B(ii), the ATO caps withholding from an additional payment at 47% of that payment. If the calculated amount comes out higher, the employer reduces it to exactly 47%. Two details matter:
- The cap applies to the additional payment only, not to the normal earnings in that pay period. The ordinary withholding on the regular wage is unaffected.
- Where the study loan component is calculated separately, the cap is tested against the combined total of the tax and loan components, not against each one on its own.
The cap can leave some payees under-withheld — for example, where the bonus pushes annual income past a study loan repayment threshold or into a higher bracket. In that case the ATO's remedy is an upwards variation: the payee enters an agreement with the employer to increase the rate or amount withheld. The calculator above shows the cap next to the calculated figure so you can see when it binds.
Which Payments Use the Schedule 5 Tax Table?
- Bonuses and incentive payments — annual performance bonuses, sign-on bonuses, KPI payments. See the bonus tax guide for how these interact with super.
- Commissions — sales commissions paid as lump sums rather than in every pay.
- Back payments and arrears — underpaid wages, backdated pay rises, and award reclassifications. Use the back pay calculator to estimate the tax on arrears.
- Lump-sum leave loading — leave loading paid as a lump sum uses Schedule 5; paid pro-rata it is added to that period's earnings instead.
- Back payments of super income streams — including lump sum payments in arrears from pensions and annuities.
Payments that do not use Schedule 5 include anything relating to a single pay period, unused leave paid out on termination (Schedule 7, NAT 3351) and employment termination payments such as redundancy (Schedule 11, NAT 70980) — our final pay calculator and redundancy pay calculator cover those cases. Where a payee has not quoted a TFN, the no-TFN rates override everything: 47% for a resident and 45% for a foreign resident, with no offsets and no loan component.
Study Loans on Bonuses and Back Payments
If the payee has a HELP, VET Student Loan, Financial Supplement, Student Start-up Loan or Australian Apprenticeship Support Loan debt, the employer must also withhold a study loan component from the additional payment — using the same method chosen for the income tax component. Calculate the bonus withholding under Method A, and the loan component must also come from Method A.
Employers who prefer to combine the two in one calculation rather than running the steps twice can use NAT 3539 (Schedule 8). The ATO notes the combined result may differ slightly from the sum of the separate table amounts because of component rounding, and accepts either. See the HECS-HELP calculator for how a bonus changes your annual repayment.
Why Does Your Bonus Look So Heavily Taxed?
A bonus is not taxed at a special punitive rate — it is withheld at your marginal rate, which is higher than the average rate applied to your normal pay. Because the tax-free threshold and lower brackets are already consumed by your salary, every bonus dollar sits in your top bracket (30%, 37% or 45%) plus the Medicare levy and any study loan repayment. If payroll skipped Schedule 5 and ran the lump sum through the regular table, withholding would be higher still, and the excess would only come back at tax return time.
Withholding is also not your final tax. Schedule 5 only decides how much is held back when the payment is made; your actual liability is settled when you lodge, and any over- or under-withholding washes out then.
Official ATO Schedule 5 Publication
The ATO publishes NAT 3348 as web content covering the calculation methods, TFN declarations, back payment reporting and worked examples. Because it is a method rather than a look-up grid, there is no printable PDF look-up table for 2026-27 — unlike the weekly, fortnightly and monthly tables.
Download the official ATO schedule 5 – tax table for back payments, commissions, bonuses and similar payments (NAT 3348)
Published 17 June 2026 by the Australian Taxation Office, applying to payments made from 1 July 2026. These are the source documents this page is checked against.
Schedule 5 Tax Table — Frequently Asked Questions
Schedule 5 (NAT 3348) questions and answers
What is the Schedule 5 tax table NAT number?
Schedule 5 is published by the ATO as NAT 3348 — "Tax table for back payments, commissions, bonuses and similar payments". The current edition was published on 17 June 2026 and applies to payments made from 1 July 2026. Unlike the weekly, fortnightly and monthly tables, Schedule 5 is a set of calculation methods rather than a look-up grid, so the ATO publishes it as web content with no printable PDF for 2026-27.
Is there a flat tax rate on bonuses in Australia?
No. A bonus is ordinary assessable income taxed at your marginal rate like any other income. Schedule 5 only governs how much is withheld at the time it is paid; your final tax is settled in your annual return, where any over- or under-withholding washes out. There is no separate, higher 'bonus tax rate' — the feeling that there is comes from withholding at your top marginal rate rather than your average rate.
Which method will my employer use — A or B?
Method A can be used for any additional payment, whatever year it relates to, and is the simpler of the two. Method B is more complex but produces withholding closer to the payee's actual tax. Method B(i) is used for back payments applied to specific periods in the current financial year; Method B(ii) is used for back payments relating to a prior financial year, and for any additional payment that does not relate to a single pay period. Both methods are acceptable to the ATO.
How does the Method A calculation actually work?
In six steps: find the gross earnings for the current pay period ignoring cents; look up the withholding on that amount in the normal tax table; divide the additional payment by the number of pay periods in the year (52, 26 or 12) and ignore cents; add that slice to the gross earnings and look up the withholding on the combined amount; subtract the first withholding figure from the second; multiply the difference by the number of pay periods. Worked through on $2,000 a fortnight with a $5,000 bonus, the apportioned slice is $192, the per-pay difference is $62, and withholding on the bonus is $1,612 — an effective rate of 32.2%.
Is there a maximum amount that can be withheld from a bonus?
Yes. Under Method A and Method B(ii) the ATO caps withholding on an additional payment at 47% of that payment. If the calculated amount — including any study loan component — comes out above 47%, the employer must reduce it to exactly 47%. The cap applies only to the additional payment, not to the normal earnings in that pay period. Because the cap can leave some high earners under-withheld, the ATO allows a payee to arrange an upwards variation with their employer.
What is the difference between Method B(i) and Method B(ii)?
Method B(i) applies to back payments that relate to specific earlier pay periods in the current financial year. It recalculates the withholding for each affected period: add the back pay for that period to what was actually paid, look up the withholding on the new total, and subtract what was already withheld. Method B(ii) applies to back payments relating to a prior financial year and to additional payments that do not belong to a single pay period. It uses your average total earnings for the year to date rather than the current period's earnings.
How is back pay for a previous financial year withheld?
Under Method B(ii). The payment is averaged across the pay periods in the year and applied to your average total earnings to date, which keeps the withholding close to your real marginal rate rather than spiking it. If you are paid back pay covering both the current and a previous financial year, the employer apportions it between the two years and uses the applicable method for each part. You may also qualify for a lump sum in arrears tax offset in your return so that receiving old income in one hit does not push you into a higher bracket.
Which payments use Schedule 5 and which do not?
Schedule 5 covers back payments and arrears, commissions, bonuses and similar lump sums, and lump-sum leave loading — provided the payment relates to more than one pay period or to an undefined period. It does not cover a payment relating to a single pay period, which is simply added to that period's earnings and withheld from the ordinary table. It also does not cover unused leave paid out on termination (Schedule 7, NAT 3351) or employment termination payments such as redundancy (Schedule 11, NAT 70980).
Does HECS-HELP (STSL) apply to Schedule 5 payments?
Yes. If the payee has a HELP, VET Student Loan, Financial Supplement, Student Start-up Loan or Australian Apprenticeship Support Loan debt, a study loan component must also be withheld from the additional payment, using the same method chosen for the income tax component. If the two are calculated separately, the 47% withholding limit is tested against their combined total, not against each one on its own.
Why does my bonus look so heavily taxed?
Because it is withheld at your marginal rate, and your marginal rate is higher than the average rate applied across your normal pay. Your salary has already used up the tax-free threshold and the lower brackets, so every bonus dollar sits in your top bracket — 30%, 37% or 45%, plus the Medicare levy and any study loan repayment. Schedule 5 actually reduces the withholding compared with running the lump sum through the ordinary tax table, which would annualise it and withhold far more.
What if the employee has not provided a TFN?
The no-TFN rates override Schedule 5. Withhold 47% from a resident payee and 45% from a foreign resident, ignoring cents, and do not apply tax offsets, Medicare levy adjustments or a study loan component.
Is superannuation paid on a bonus?
Usually yes. Performance and incentive bonuses are generally ordinary time earnings, so the 12% superannuation guarantee applies on top of the gross bonus. Bonuses tied specifically to overtime can be excluded. Schedule 5 governs only the PAYG withholding — it says nothing about super, which is calculated and paid separately by your employer.
How this calculator works▼
The calculations on this page implement the ATO Schedule 5 apportionment arithmetic — divide the additional payment by the number of pay periods, add the slice to the base earnings, take the withholding difference and multiply it back — on top of the Schedule 1 (NAT 1004) coefficient tables at FY2026-27 rates. They assume the tax-free threshold is claimed and that pay is even across the year, in which case Method A and Method B(ii) coincide; where your earnings have varied, Method B(ii) uses your average total earnings to date and will differ.
Two limits to be aware of. First, the figures here are the uncapped apportionment result; the ATO's 47% withholding limit is shown alongside it in the calculator and your employer must apply it where it binds — most often on a small bonus paid to a high earner with a study loan. Second, Method B(i) for current-year back pay recalculates each affected pay period individually and is not modelled here; use the back pay calculator or your payroll system for that case. Always verify payroll-critical amounts against NAT 3348.
Sources & References
- 1Schedule 5 – Tax table for back payments, commissions, bonuses and similar payments (NAT 3348)— Australian Taxation Office
- 2Schedule 5 — Working out the withholding amount— Australian Taxation Office
- 3Schedule 1 – Statement of formulas for calculating amounts to be withheld (NAT 1004)— Australian Taxation Office
Last verified: 28 July 2026. Our content is based on the latest information from official Australian government sources.
James Harrington
Verified AuthorSenior Tax & Payroll Analyst
CPA, Registered Tax Agent (25787011)
James is a CPA-qualified tax professional with over 14 years of experience in Australian taxation and payroll systems. He spent six years at the Australian Taxation Office working on PAYG withholding and individual tax return processing before moving into financial publishing. He now leads the tax content at Pay Calculator Australia, translating complex ATO legislation into clear, actionable guidance.
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