Withhold PAYG from employee and contractor payments
Employers must withhold tax from wages, certain contractor payments + report via STP / BAS.
Who must comply
Employers + payers of withholding-attracting payments.
What triggers it
Making a payment subject to PAYG withholding.
When due
Withhold each pay event; remit via BAS.
Evidence required
TFN declarations; STP submissions; BAS withholding payments.
Max penalty
Failure-to-withhold penalty 75% of unpaid; director penalty notices for unremitted withholding
Summary
PAYG withholding obligations apply to wages (per TFN declaration), contractor payments where the contractor has not quoted ABN (47%), and various other payments (e.g. directors' fees, royalties). Withheld amounts reported via STP + remitted to ATO via BAS.
Enforced by
Source legislation
Topics
Related obligations
- CWLTHAustralian Business Number (ABN) applicationEntities carrying on an enterprise in Australia need an ABN — without one, payers must withhold 47% PAYG from your payments. How to apply and who's eligible.
- CWLTHLodge Business Activity Statements at assigned frequencyGST-registered entities must lodge a BAS monthly, quarterly or annually as the ATO assigns.
- CWLTHMake trustee resolutions for trust distributions by 30 JuneDiscretionary trust trustees must validly resolve to distribute trust income before the end of the FY.
- CWLTHPay company PAYG/GST/SG or face Director Penalty Notice (DPN)Directors personally liable for unpaid company PAYG, GST + SG via DPN regime.
- CWLTHTASA Code Determinations from 1 August 2024Tax practitioner code reformed via Code Determinations — false + misleading statements + supervision + breach reporting.
- CWLTHDGR annual self-review (from 1 July 2024)ACNC-registered DGRs must complete annual self-review.
Frequently asked questions
- Who must comply with Withhold PAYG from employee and contractor payments?
- Employers + payers of withholding-attracting payments.
- What triggers Withhold PAYG from employee and contractor payments?
- Making a payment subject to PAYG withholding.
- When is Withhold PAYG from employee and contractor payments due?
- Withhold each pay event; remit via BAS.
- What is the maximum penalty for Withhold PAYG from employee and contractor payments?
- Failure-to-withhold penalty 75% of unpaid; director penalty notices for unremitted withholding
- What evidence is required for Withhold PAYG from employee and contractor payments?
- TFN declarations; STP submissions; BAS withholding payments.
Source: https://ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/paying-your-workers. Rules Mate is not a law firm. Always verify against the live regulator source before acting.