Provide your Tax File Number when you open your bank accounts
When you open accounts with us, we recommend you provide your Tax File Number (TFN). Because, interest earned on those accounts may be subject to Withholding Tax (WHT).
The benefit of giving us your Tax File Number (TFN)
It’s not compulsory for you to provide your TFN when you open your accounts. But, if we don’t have it recorded, Withholding Tax (WHT) may apply to interest earned on your accounts.
By giving us your TFN you should receive the full amount of the interest earnings in your account. If you do your tax online some fields are pre-filled for you, including interest earnings. But, this can only be pre-filled if you’ve provided your TFN. So, giving us your TFN when you open your accounts can also make it easier to complete your tax return.
What’s Withholding Tax (WHT)?
We have to withhold an amount from your interest earnings and send it to the Australian Taxation Office (ATO) if you haven’t provided us your TFN, or if you’re a non-resident of Australia.
WHT is calculated using the top marginal rate of tax (which is 45%) plus Medicare levy (which is 1.5%). If you’re a non-resident, the WHT rate is 10%. WHT applies to accounts that earn over $120 interest (for adults) and $420 (for children) for the financial year on a pro-rata basis.
If you’re exempt from paying income
tax and have lodged a TFN exemption with us WHT won’t apply on future credit interest you earn from your account.
You might like to read our article Lodging a Tax File Number exemption for more information.
How to provide your Tax File Number (TFN)
You can give us your TFN at any time by:
- using NAB Internet Banking
- giving us a call on 13 22 65
- visiting your nearest branch.
Privacy Act legislation regulates the use of your TFN by financial institutions like us. When we record your TFN it’s done with your privacy and security in mind.
Remember, if you have a joint account both people named on the account need to record their TFN. Once you’ve given us your TFN, Withholding Tax shouldn’t affect future interest credited to your account.
What to do if Withholding Tax has been incorrectly withheld from your account
If during the income year, Withholding Tax (WHT) has been incorrectly withheld from your account, you can contact us to have WHT refunded to you. Otherwise you can contact the Australian Taxation Office (ATO) or your accountant to have it refunded through your tax return if the error was from an earlier income year.
You should always contact the ATO or your accountant for any queries about your tax return.
More information:Source: learn.nab.com.au