As a business owner, you have an obligation under the PAYG withholding rules to collect tax from the payments you make to employees and certain businesses to ensure that they meet their end-of-year tax liabilities. 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.
Why do I need to register for PAYG?
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 I register for PAYG?
PAYG registration is required from the day that you are first required to withhold an amount from a payment.
- You can register for PAYG when applying for your ACN and ABN through LawPath’s company registration application;
- If you already have an ABN you can add a PAYG registration to the ABN through the ATO Business Portal (using an administrator AUSkey) or through your registered tax or BAS agent.
By registering a company through LawPath, you will have the ability to register for PAYG and ensure your business is compliant. We have company registration packages that will cover registrations from the get-go, that includes PAYG, ACN, ABN, GST and TFN.
If your business is already up and running check out how to register for PAYG and what your obligations are.
Ready to register a company? Contact a LawPath consultant on 1800 529 728 to learn more about customising legal documents, obtaining a fixed-fee quote from our lawyer marketplace or to get answers to your legal questions.