Pay as you go (PAYG) withholding refers to collecting tax from employees income and ensures businesses meet their tax liabilities. If you’re making payments to employees or payees, PAYG will apply to your business.
When does PAYG withholding apply ?
You will need to register for PAYG if any of the following apply to your business:
- You have employees;
- You employ workers who enter an agreement to withhold payments e.g. contractors;
- When making payments to businesses that don’t quote their ABN.
To make payments subject to withholding you must register for PAYG withholding. Once registered what does this mean? You will need to withhold amounts from wages and other payments. You will need to then provide to the Australian Taxation Office (ATO) activity statements, payment summaries of employees and payees and an annual PAYG payment summary. Payments will also need to be made to the ATO
How do you register?
PAYG payments are required from the day that you are first required to withhold an amount from a payment.
- You can register for PAYG when applying for an ABN (on the same form);
- If you have an ABN you can add a PAYG withholding account to the ABN at abr.gov.au (using an administrator AUSkey), form at https://www.ato.gov.au/General/Gen/Order-ATO-products-online/ or through your registered tax or BAS agent.
How can LawPath help?
Let LawPath help you register for PAYG, when you are registering a company. We make starting a business easy providing PAYG, ACN, ABN, GST, TFN and Domain Registration and much more for $596. If your business is already up and running read on how to register for PAYG and what your obligations are.
Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.