Do children need to provide a TFN?
The Bank is authorised under the taxation laws to collect a Tax File Number (TFN), an Australian Business Number (ABN), or an exemption code. It’s not an offence if you don’t provide a TFN, an ABN, or an exemption code, but by law, we may be required to withhold a portion of your interest earned on the account. This also applies to accounts held in the name of children.
Are children subject to withholding tax if a TFN isn’t provided?
Anyone (including account holders under the age of 18) who has earned interest on their income may have tax withheld if there’s no TFN quoted on their account, or if a TFN exemption code isn’t provided.
What is ‘No TFN Withholding Tax’?
‘No TFN withholding tax’ may apply to interest earned on your account(s) where there’s no TFN linked to the account(s). Where applicable, ‘No TFN withholding tax’ will be withheld at the highest marginal tax rate.
What do I need to do if tax was withheld on my child’s account?
To avoid paying ‘No TFN withholding tax’ on your child’s account, you need to provide your bank with a valid TFN or TFN exemption code for your child’s account.
Once you’ve provided the TFN or TFN exemption code to your bank, you can request for any withholding tax that was applied to interest payments made to your child’s account during the current financial year to be refunded by visiting your local bank branch.
For any tax withheld in previous financial years, you may claim these by lodging an income tax return with the Australian Tax Office (ATO), or completing a ‘Refund of over-withheld withholding application’ form which can be obtained from the ATO and submitted to the ATO, along with any required supporting documents.
If you’ve previously linked a ‘child under 16 years of age’ exemption code to the account, your bank may still withhold tax if interest paid on the account exceeds certain thresholds.
What are the ‘No TFN withholding tax’ thresholds for children’s accounts?
Withholding tax thresholds can vary depending on your child’s age during the calendar year the interest income is paid, as well as the amount and circumstances of their income.
Withholding tax thresholds are set by the ATO and pro-rated according to how many days the interest income is payable, if it’s for a period of less than a year. You can refer to the ATO website for more information, including specific threshold amounts applicable to your child’s savings account(s).
Whose TFN should be quoted on my child’s account?
You should refer to the Australian Tax Office (ATO) website or seek professional tax advice when deciding which TFN is most appropriate to provide.
How can I get a TFN for my child?
You can apply for your child’s TFN through Australia Post or Services Australia. Visit the ATO website for more information on how to apply for a TFN for your child.
How do I provide a TFN on my child’s account?
There are different ways you can provide a TFN once you decide on whose TFN to provide.
If your child banks with us and has their own TFN, they can provide their TFN by logging into the CommBank app or NetBank and following the steps under ‘How to see, add or update your TFN or exemption’.
If you as a parent/guardian (authorised operator) are providing your TFN for your child’s account, or if your child doesn’t have NetBank access, you can provide your/their TFN by visiting your local branch.
We don’t automatically apply TFNs from an existing account to any new account(s) created, so the account holder or parent/guardian must provide consent for a TFN to be added to any new account(s) created.
Examples of how withholding tax is calculated
Here are some examples of how withholding tax is calculated – just be sure to refer to the ATO website or seek professional tax advice for specific guidance on your circumstances:
$420 threshold: A child under 16
- $420 threshold applicable: A child below age 16 earning less than $420 per year in interest
Junie is 10 years old and has a savings account that earned interest of $32 in July and $35 in August.
A TFN has not been quoted on Junie’s savings account.
None of Junie’s interest income will be subject to ‘No TFN withholding tax’ as the payments fall below the applicable pro-rated tax-free threshold of $35.67* for both months.
- $420 threshold applicable: A child below age 16 earning more than $420 per year in interest
Karen is 7 years old and has a savings account that earned interest of $50 in July and $60 in August.
A TFN has not been quoted on Karen’s savings account.
All of Karen’s interest income will be subject to ‘No TFN withholding tax’ as the payments exceed the applicable pro-rated tax-free threshold of $35.67* for both months.
$120 threshold: A child who is 16 or 17
- $120 threshold applicable: A child age 16 or 17 earning less than $120 per year in interest
Emma is 17 years old and has a savings account that earned interest of $10 in July and $9 in August.
A TFN has not been quoted on Emma’s savings account.
None of Emma’s interest income will be subject to ‘No TFN withholding tax’ as the payments fall below the applicable pro-rated tax-free threshold of $10.19* for both months.
- $120 threshold applicable: A child age 16 or 17 earning more than $120 per year in interest
Logan is 17 years old and has a savings account that earned interest of $20 in July and $15 in August.
A TFN has not been quoted on Logan’s savings account.
All of Logan’s interest income will be subject to ‘No TFN withholding tax’ at the highest marginal tax rate (based on 2024 rate of 47% - i.e. $9** and $7** respectively) as the payments exceed the applicable pro-rated tax-free threshold of $10.19* for both months.
A child who has turned 16 within the calendar year
- A child who turned 16 during the year: Receiving 2 interest payments during the year (1 interest payment below the applicable tax-free threshold and 1 exceeding the threshold)
Nick was 15 years old and turned 16 years old during the year on 1 June. He has a savings account that earned interest of $30 in May and $50 in August.
A TFN has not been quoted on Nick’s savings account.
Nick’s interest income of $30 in May will not be subject to ‘No TFN withholding tax’ as the payment falls within the applicable pro-rated tax-free threshold $35.67*. As for the interest income of $50 in August, this will be subject to ‘No TFN withholding tax’, even though Nick is deemed to still be under 16 years old until the end of the year, since his interest income earned exceeds the applicable tax free threshold of $35.67*.
Please note the examples above are for indicative purposes only and should not be taken as current rates or thresholds.