Pay As You Go (PAYG) withholding

Pay As You Go (PAYG) withholding is a legal requirement to withhold amounts for income tax purposes.

If you have employees, you're required to withhold tax from payments you make to them. You may have to withhold tax from payments to other workers, such as contract workers. As a new employer, you must register with the Tax Office before you withhold from payments to your employees.

You may also need to withhold an amount from payments to other businesses if they don't quote their ABN to you on an invoice or other document if required.

You must send all withheld amounts to the Tax Office.

What to do...

From the Tax Office website:
- read the Quick guide to PAYG withholding for business
- find out more about PAYG withholding essentials
- read the No ABN withholding - questions and answers.
- use the Tax Withheld Calculator to calculate the amount you need to withhold from your employees and other workers.

To register for PAYG withholding:

use the same form that the you use when you apply for an ABN, or
phone 13 28 66 (you will need to have your ABN or tax file number to register over the phone), or
phone 1300 720 092 to request a copy of the Add a new business account form to complete.