Pay as you go withholding
Your not-for-profit organisation will have pay as you go (PAYG) withholding obligations for its employees. It may also have to withhold amounts from payments to independent contractors and volunteers under certain circumstances.
Organisations that are exempt from income tax are not exempt from PAYG withholding obligations. Also, PAYG withholding obligations for not-for-profit organisations are the same as for businesses.
Employees and independent contractors
If your organisation has employees, you must withhold amounts from their pay and send the withheld amounts to us. This process is called withholding and is done through the pay as you go (PAYG) withholding system.
Under the PAYG system, independent contractors can provide for their own income tax liability by entering into voluntary agreements authorising your not-for-profit organisation to withhold amounts from their payments.
If your organisation is in a labour hire arrangement, it must withhold from payments to the labour hire firm if the firm has not quoted its ABN.
If your organisation provides workers to its clients under a labour hire arrangement, it must withhold from payments to these workers.
If any of your employees or other payees has a Higher Education Loan Program (HELP), Trade Support Loan (TSL) or Financial Supplement debt, they must advise you of this. Your not-for-profit organisation will then need to withhold additional amounts from their payments.
You must register your organisation with us when you are required to withhold from payments to your employees and where applicable, independent contractors.
Your not-for-profit organisation must withhold amounts from payments to a volunteer if both of the following apply:
- The payment is for a supply of goods and services made in the course of the volunteer's enterprise.
- The volunteer has not quoted their ABN.
If your not-for-profit organisation has employees, you must withhold amounts from their pay and send the amounts to us. You may also have to withhold in other circumstances, for example, when you make a payment to an independent contractor under a voluntary agreement.