PAYG withholding - varying your PAYG withholding

What is a withholding variation?

Under tax law, the Commissioner of Taxation may, to meet the special circumstances of a particular case or class of cases, vary the amount a payer is required to withhold from a withholding payment. The main purpose of varying your rate or amount of withholding is to ensure that the amounts withheld during the income year best meet your end-of-year tax liability. An example is where the normal rate or amount of withholding would lead to a large credit at the end of the income year because your tax deductible expenses are higher than normal.

You can request an increase or decrease in the rate or amount of withholding.

If you believe your circumstances warrant a variation of the rate or amount of withholding, you will need to determine whether the variation is upwards or downwards.

The granting of a variation does not mean that we have accepted the tax treatment of the income and deductions in your application. Your actual tax liability will be determined when you lodge your income tax return. Under tax law, you must keep records of your relevant income and expenditure for a minimum of five years.