PAYG Withholding… What is it?

Let’s talk Pay As You Go (PAYG) Withholding.  

It’s a system of withholding income tax from an employee or contractor’s salary or wages. The payer of the income pays the tax directly to the ATO on behalf of the employee or contractor.

As an employer, you have a role to play in helping your payees meet their end-of-year tax liabilities. You do this by collecting PAYG Withholding amounts from payments you make to:

☞ Your employees

☞ Other workers, such as contractors, that have voluntary agreements with you. 

☞ Payments to businesses that do not quote their Australian Business Number (ABN).

You will need to register your business by the day you are required to start withholding amounts, which is simple to do online or by phone for ABN registered businesses.