When and how you report and pay amounts to us depends on whether you are a small, medium or large withholder. To work it out, we look at how much your total withholding is, or is likely to be, each year.
Small withholders withhold $25,000 or less each year. They report and pay withheld amounts quarterly.
As a small withholder, you must report and pay amounts to us on your activity statement. We mail an activity statement to you each quarter, detailing when your payment is due.
If you withheld amounts because a foreign resident did not quote their ABN, show these amounts separately at label W4 on your activity statement.
Medium withholders withhold between $25,001 and $1 million each year. They report and pay withheld amounts monthly.
As a medium withholder, you must report and pay amounts to us on your activity statement. We mail an activity statement to you each month, detailing when your payment is due.
If you withheld amounts because a foreign resident did not quote their ABN, show these amounts separately at label W4 on your activity statement.
Large withholders withhold more than $1 million a year. They must pay withheld amounts to us electronically.
If you are already registered as a large withholder, continue to follow the existing procedures for all your other PAYG withholding obligations.
If you are a small or medium withholder, you can pay your withheld amounts (along with other amounts you are liable to pay) to us:
If you are a large withholder, you must pay your withholding amounts electronically via direct credit or BPAY®.
Payment summaries and reporting
If you withhold from payments you make to a foreign resident, there are reporting obligations you must meet at the end of the year. You must:
- provide each foreign resident with a payment summary
- send an annual report to us.
Your obligations are different depending on whether you withheld an amount for foreign resident withholding or where an ABN was not quoted.
Reporting amounts you withhold
What is a payee payment summary?
A payment summary is a document you must give each of your payees. It includes details of the gross payments you made to a foreign resident payee and amounts you withheld from those payments. It also provides information your payee need to prepare their tax return.
When to provide a payment summary
You must provide a payment summary to each of your payees, detailing the payments you made and amounts you withheld from those payments for the relevant period.
Your payee can ask for a payment summary at any time during a financial year before 9 June. You must give the payment summary to the payee within 14 days of their request.
You must give a payment summary to the payee by 14 July following the end of the financial year if either of the following applies:
- they have not requested a payment summary during the financial year
- there are payments for the financial year that have not been shown on an earlier payment summary.
What period is covered by a payment summary?
When a payee first asks for a payment summary during a financial year, that payment summary must include details of all payments made from 1 July until the date of the payee's request.
If a payee asks for additional payment summaries during the financial year, or you issue a payment summary at the end of the financial year, the later payment summaries should only include details of payments that have not been shown previously.
What form does a payment summary take?
You must prepare your own payment summaries and include the following information:
- title - PAYG withholding from foreign residents - payment summary
- period covered by the payment summary - for example, 'Payment summary for the period 01/07/2007 - 30/06/2008'
- your business name as it appears on your activity statement
- your ABN
- the payee's name and overseas address, if known
- the payee's ABN
- the payee's Australian tax file number (TFN), if known
- the payee's taxpayer identification number (TIN), if known
- the payee's country of residence for tax purposes
- the total gross amount you paid (in whole $AUD) to the foreign resident payee during the relevant period
- the total amount withheld (in whole $AUD) from the payments you made
- the words 'To be retained by the payee for tax purposes'.
You should make two copies of the payment summary - one for the payee and one for your records. You can keep an electronic copy rather than a paper copy if you wish.
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Do not send copies of these payment summaries to us.
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Example - self-prepared payment summary
PAYG withholding from foreign residents - payment summary
Payment summary for period 01/07/2007 - 30/06/2008
Payer details
Payer: ABC Casino Pty Ltd
Payer ABN: 12 345 678 900
Payee details
Payee: Mr Tour Operator
Payee address:
1 Tour Avenue, Malaysia
Payee's country of residence for tax purposes:
Malaysia
TFN: 98 765 432
ABN: 11 222 333 444
TIN:
Total gross payments $20,000
Total amount withheld $600
To be retained by the payee for tax purposes
Annual report
As a payer, you must provide us with an annual report detailing all payments you made and amounts you withheld from foreign residents in a financial year. You must lodge the annual report by 31 October following the end of the financial year.
You can report these amounts to us either electronically or using one of our paper forms.
Reporting amounts withheld where an ABN was not quoted
Payment summaries
If you withheld amounts because a foreign resident did not provide their ABN, and they were required to provide it, you must give them a payment summary at the same time as you pay them the net amount, or as soon as practicable after this.
When issuing a payment summary for withholding where the payee has not quoted their ABN, you can do either of the following:
Self-prepared payment summaries must include:
- the payer's name
- the payer's ABN or withholder payer number (WPN)
- the payer's branch number, if applicable
- the payee's name, if known
- the payee's address, if known
- the date on which the payment was made
- the amount of the total payment, including the market value of non-cash benefits
- the total amount withheld
- the words 'To be retained by the payee for tax purposes'.
The document must be in English and signed by you as the payer.
Give the original to the payee and keep a copy for your records. You can keep an electronic copy of the payment summary.
Annual report
At the end of the financial year you need to separately report details of all amounts you withheld because an ABN was not quoted. You can lodge this report:
You must send this report to us by 31 October each year. You don't have to send copies of the payment summaries you provided to your payees, but you must keep copies for your records.
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To obtain a copy of either of the following forms, phone us on 13 72 26 at any time:
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You will need your ABN to place an order.
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Record keeping
You must keep all records that explain your PAYG withholding transactions. Records must be:
- in English or in a form that can be translated into English
- readily accessible in either written or electronic format.
You must keep your business records for at least five years.
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More information
For more information about PAYG withholding, refer to the following forms and publications.
Bulletins, guides and fact sheets
To obtain copies of our forms or publications, phone us on 1300 720 092.
If you are phoning from outside Australia, dial +61 before the Australian number, that is, +61 1300 720 092.
For more information:
- phone us on 13 28 66
- speak to your tax advisor.
If you do not speak English well and need help from us, phone the Translating and Interpreting Service on 13 14 50. If you are calling from overseas, phone +61 3 9203 4027.
If you are deaf, or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below:
- TTY users, phone 13 36 77 and ask for the ATO number you need. If you are calling from overseas, phone +61 7 3815 7799
- Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need. If you are calling from overseas, phone +61 7 3815 8000.
- internet relay users, connect to the NRS on www.relayservice.com.au and ask for the ATO number you need.
Last Modified: Wednesday, 5 May 2010