Employers have a role to play in helping their employees meet their end-of-year tax liabilities. When you pay your employees you have to withhold tax and pay it directly to the Australian Taxation Office (ATO) – this is known as ‘pay as you go withholding’ (or PAYG withholding).
Withholding amounts depend on the employee's salary. You need to collect Pay As You Go (PAYG) Withholding from employees, contractors, and businesses you pay that do not provide you with their Australian Business Number (ABN).
This guide will provide answers for anyone asking: What is PAYG in Australia? Here, we’ll explain Australian taxation regulations, and clarify your obligations as an employer.
Keep reading for answers to these FAQs about PAYG withholding:
- What does ‘PAYG withholding’ mean in Australia?
- What type of income is subject to PAYG withholding?
- Why do you need to withhold from payments?
- Do I have to use PAYG withholding?
- How to calculate PAYG withholding tax?
- Where to register for PAYG withholding?
- What payments do you need to withhold amounts from?
- When do you need to pay and report PAYG withholdings?
- What are the requirements for annual reporting?
- How does PAYG withholding work when a worker leaves or retires?
- Are there exceptions to PAYG withholding obligations?
- How do I stay on top of PAYG withholding?