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
Who must comply with this? The applicability test by industry, business structure and size.
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
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Reading
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://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/. Rules Mate is not a law firm. Always verify against the live regulator source before acting.