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  • PAYG withholding gap 2015-16

    The pay as you go (PAYG) withholding gap is an estimate of the difference between the tax that should have been withheld by employers from salary and wages paid to their employees according to the law (theoretical PAYG withholding), and the actual amounts of income tax withholding from salary and wages received by us for a defined period, typically a financial year.

    Under the Taxation Administration Act 1953, employers have an obligation to collect tax from payments made to employees and remit that tax to the ATO. Employers must register with us under the PAYG withholding scheme to do this.

    PAYG withholding provides an effective way for most people to meet their annual income tax obligations. The withholding system also ensures we collect a more stable, secure source of revenue throughout the year. This revenue supports a range of community services.

    Key facts on PAYG withholding for 2015-16 financial year include:

    • there were about 905,000 employers
    • $176 billion PAYG withholding was paid by employers to the ATO
    • 95% of PAYG withholding was paid to us on time.

    Note: Businesses can use our Employee/contractor decision tool to determine if a worker is an employee or contractor for tax and super purposes.

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      Last modified: 10 Jan 2020QC 61087