PAYG withholding - what you need to do for employees
You (or the partnership, company or trust) must:
- register for PAYG withholding
- work out which payments to withhold from
- work out how much to withhold
- report and pay withheld amounts to us
- provide annual payment summaries to employees
- send an annual statement to us.
Register for PAYG withholding
You must register with us before you withhold from payments to employees.
Work out how much to withhold
The amount you withhold from an employee's pay depends on the amount you pay them and the information they have given you on either or both of a:
- Tax file number declaration
- Withholding declaration.
We publish PAYG withholding tables that show the amounts to withhold from weekly, fortnightly and monthly payments. We also have a tax withheld calculator to help you work out how much to withhold.
Some business accounting software packages will do the calculations for you. If you use one of these packages, it is important to keep it up to date as tax rates and other withholding factors may change from year to year.
Some of your workers may find the amount withheld using the tax tables is either too much or too little when compared to their actual end-of-year tax liability. In this situation, a worker can apply to us to vary their rate of withholding upwards or downwards.
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For more information about withholding variations, refer to PAYG withholding (NAT 8075).
You can obtain:
- the tax tables
- by referring to Tax tables
- by phoning us on 13 27 66.
- employee declarations by phoning us on 13 28 66.
Both are also available from most newsagents.
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Report and pay withheld amounts
As a small business, you generally report and pay the withheld amounts to us quarterly when you lodge your activity statements.
You must also:
- provide each employee with an annual payment summary showing the amount you withheld from them during the year
- send an annual report to us showing withheld amounts.
Each year we send a stationery package to employers who are registered for PAYG withholding (except those who report electronically). The package includes copies of payment summaries, guidelines for completing payment summaries and other information.
Sections within Employer obligations
Last Modified: Thursday, 8 September 2011