Deductions under a notice pursuant to section 72A

A notice pursuant to section 72A or a section 72A notice means that some of the money you would normally pay to your employee or contractor must be paid to us.

If you get a section 72A notice, you are legally required to deduct the amount of child support we ask you to.

How much child support to deduct

The section 72A notice will tell you the amount of money you need to pay us. It may ask you to pay:

  • a lump sum amount
  • periodic amounts or
  • a cents in the dollar amount

You need to follow the instructions in the notice until a certain amount of money has been paid. We’ll tell you what the amount is.

You need to do what the section 72A notice tells you. Even if you don’t currently owe your employee or contractor any money there may be other instructions. If you owe the child support recipient money in the future, you must deduct the money the next time you pay them.

Deductions under a section 72A

For each deduction you make under a section 72A notice:

  1. check the notice for the amount you need to deduct
  2. deduct any tax from the gross payment, excluding GST, before child support deductions
  3. deduct the lump sum amount requested or, if the notice asks for a cents in the dollar amount, work out the deduction on the person’s gross payment, excluding GST
  4. send the deductions to us within 7 days
  5. the remaining amount can be paid to the person or used to make other deductions

You cannot change the amount we ask you to deduct unless we send you:

If you get more than 1 notice

You may get more than 1 notice from us, such as separate notices from Centrelink and Child Support. You should comply with the notices in the order you get them.

Call us if you get a notice from us requesting child support, and:

  • a notice from someone else requesting money, or
  • a court order requesting funds for child support or any other reason

If you are deducting from more than 1 person’s wage, you need to give us:

  • a breakdown of the total deductions you pay us, and
  • the report of any deduction variations

If you are registered for Child Support Business Online Services you can report the variation online. Otherwise let us know by phone or by posting or faxing a Child Support Deduction Report.

We prefer you to pay Section 72A Notices via Bpay. If you are only deducting for one person and are paying by cheque, use the Section 72A Notice – remittance slip for employers form.

Examples of how to calculate deductions

Tax amounts quoted are examples only. Refer to the Australian Taxation Office for rates applicable to your employee.

Example 1 - cents in the dollar amount deductions

In this example the Section 72A notice requires you to deduct 15 cents for every dollar.

The person is paid $450 excluding GST.

Payment and decutions Total payment Tax deducted Deducted child support $450.00 x $0.15 Pay remaining
Amount $450.00 $24.00 $67.50 $358.50

We must calculate Child support using the gross payment excluding GST.

If there are not enough funds to cover the required child support and tax deductions, you should deduct the full amount of tax first.

Tax amounts quoted are examples only. Refer to the Australian Taxation Office for rates applicable to your employee.

You need to pay us within 7 days of making the deductions.

Example 2 - periodic amount deductions

Jamie usually gets payments of between $300 and $500 excluding GST each week for work done.

The Section 72A notice requires you to deduct $110 per week.

In this example, Jamie:

  • earns $500 in the first week
  • earns $450 in the second week, and
  • earns $90 in the third week

Week 1

Payment and deduction Total payment Tax deducted Deducted child support Pay remaining
Amount $500 $38 $110 $352

Week 2

Payment and deduction Total payment Tax deducted Deducted child support Pay remaining
Amount $450 $24 $110 $316

Week 3

Payment and deduction Total payment Tax deducted Deducted child support Pay remaining
Amount $90 $0 $90 $0

In Week 3, because you can’t deduct the full $110, you only deduct the $90 paid.

If there are not enough funds to cover the required child support and tax deductions, you should deduct the full amount of tax first.

Tax amounts quoted are examples only. Refer to the Australian Taxation Office for rates applicable to your employee.

Example 3 - lump sum termination payment deductions

Alex’s weekly salary is $600. Alex resigns and cashes out 5 weeks of annual leave.

We send a Section 72A notice for a lump sum amount of $962.

Payment and deduction Total annual leave payment Deducted child support Pay remaining
Amount $3,000 $962 $2,038

You need to pay $962 to us within 7 days of making the deductions.

You need to deduct tax from the gross payments. You should deduct the tax before child support. Tax deduction requirements may vary for lump sum payments. We didn’t include them in this example.

Read more Child Support information for employers.

Page last updated: 27 August 2017