# Calculate Australian contractor withholding and net payment

Work out withholding and the net payment for a supplier who has not quoted an ABN, a voluntary agreement or labour hire, with the BAS labels and a reporting note.

Canonical: https://aroai.com/tools/au_contractor_withholding/

## Tool reference

MCP tool ID: `au_contractor_withholding`. Availability: Live. Country: Australia.

Credit use: 1 credit.

## Input schema

```json
{
  "$schema": "https://json-schema.org/draft/2020-12/schema",
  "type": "object",
  "properties": {
    "tax_year": {
      "description": "Defaults to today's Australian financial year (Sydney time) when it is 2026-27; otherwise required.",
      "type": "string",
      "const": "2026-27"
    },
    "payment_type": {
      "type": "string",
      "enum": [
        "no_abn",
        "voluntary_agreement",
        "labour_hire"
      ]
    },
    "gross_payment": {
      "type": "number",
      "minimum": 0,
      "maximum": 100000000,
      "description": "Invoice total before withholding for no_abn or voluntary_agreement. For labour_hire, enter gross pay for the selected pay period, excluding GST."
    },
    "abn_quoted": {
      "type": "boolean"
    },
    "no_abn_exception_applies": {
      "type": "boolean"
    },
    "voluntary_agreement_confirmed": {
      "type": "boolean"
    },
    "payee_is_individual": {
      "type": "boolean"
    },
    "gst_amount": {
      "description": "Exact GST charged in the invoice; required for a voluntary agreement, including 0 when no GST is charged.",
      "type": "number",
      "minimum": 0,
      "maximum": 100000000
    },
    "commissioners_instalment_rate_percent": {
      "description": "Commissioner's instalment rate (CIR) shown in the payee's current ATO notice, as a percentage.",
      "type": "number",
      "minimum": 0,
      "maximum": 100
    },
    "agreement_uses_cir_below_20_percent": {
      "default": false,
      "description": "Set true only if the written voluntary agreement says to use a known CIR below 20%.",
      "type": "boolean"
    },
    "labour_hire_arrangement_confirmed": {
      "type": "boolean"
    },
    "frequency": {
      "type": "string",
      "enum": [
        "weekly",
        "fortnightly",
        "monthly"
      ]
    },
    "tax_free_threshold_claimed": {
      "type": "boolean"
    },
    "tpar_service_category": {
      "description": "Choose a service category only when confirmed; omitted means unknown and TPAR may still apply.",
      "type": "string",
      "enum": [
        "building_construction",
        "cleaning",
        "courier_road_freight",
        "information_technology",
        "security_investigation_surveillance",
        "none",
        "unknown"
      ]
    }
  },
  "required": [
    "payment_type",
    "gross_payment",
    "agreement_uses_cir_below_20_percent"
  ],
  "additionalProperties": false
}
```

## Example input

```json
{
  "payment_type": "voluntary_agreement",
  "gross_payment": 3000,
  "voluntary_agreement_confirmed": true,
  "payee_is_individual": true,
  "agreement_uses_cir_below_20_percent": false,
  "tpar_service_category": "building_construction"
}
```

## Usage notes

- The 47% no-ABN rule applies only after you confirm no exception applies, and worker status and labour hire are yours to decide.
- Voluntary agreements use 20% of the payment excluding GST, unless a lower instalment rate is supplied.
- The tax year defaults to the current one, and a service category you have not confirmed is reported as unknown for the taxable payments report.