PAYG Withholding

Pay as you go (PAYG) withholding is a system for withholding amounts from payments to employees, other individuals and businesses. An entity will have withholding obligations if the entity:

• Has employees, including company directors and officeholders

• Has other workers such as contractors, and voluntarily agrees to withhold tax from payments to them

• Makes payments to other businesses, if they don't quote an Australian business number (ABN) to the entity, or

• Makes certain other payments that are subject to withholding

If you are an employer or run a business and withhold amounts from payments, you need to:

• Register for PAYG withholding

• Register as an employer of working holiday makers (417 or 462 visa's) if applicable

• Withhold amounts from wages and other payments

• Lodge activity statements and pay the withheld amounts to the Australian Taxation Office (ATO)

• Provide payment summaries to employees and other payees, and

• Provide the ATO with an annual report once each income year has ended

Payment summaries and annual reports are not required in relation to amounts reported using single touch payroll.