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  • PAYG withholding registration during COVID-19

    We have updated our guidance on employer Pay as you go (PAYG) withholding registration, for employees working in Australia temporarily due to COVID-19 effects on travel.

    From 1 July 2020, foreign resident employers must withhold PAYG of:

    • Australian resident employees
    • foreign resident employees whose employment income is Australian sourced income.

    The exception is foreign resident employees for whom a double-tax agreement (DTA) exception applies. Australia’s DTAs may allow foreign residents to earn employment income in Australia for a short period – usually 183 days – without being taxed in Australia. Each DTA must be checked carefully as wording, conditions and time periods vary from DTA to DTA.

    The foreign resident employer must withhold if they believe at the time that employment income is paid, based on the facts and circumstances of that employee, that the DTA exception will not apply because the employee is likely to remain in Australia for more than the applicable time period.

    For more information on residency of individuals, source of income and the DTA exception refer to Residency and source of income.

    See also:

    Last modified: 04 Aug 2020QC 63336