- On July 1, 2021
PAYG Withholding is the tax that the employer holds back from the Employees’ wages and remits to the tax office.
You collect PAYG withholding amounts from payments you made to:
- Wages paid to employees
- Other workers such as contractors
- Businesses that don’t quote their ABN.
How does it work?
You must first register for PAYG withholding before you are first required to make a payment that is subject to withholding.
The software that you to do your payrun should automatically calculate the amount that needs to be held back as part of the payrun.
Once you have paid employees, their net pay, you then need to make sure you pay the PAYG withheld to the tax office by the due dates.
You pay the PAYG quarterly (as part of lodging your quarterly Business Activity Statement), but as soon as you are expecting to withhold more than $25,000 you need to lodge on a Monthly basis via Instalment Activity Statement.