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PAYG withholding obligations

How to meet pay as you go (PAYG) withholding and reporting obligations when paying a super benefit to a member.

Last updated 19 August 2018

You must withhold tax from benefit payments to members who are:

  • under 60 years old
  • under 60 years old and receives a reversionary capped defined benefit income stream – if the deceased was 60 years or over when they died
  • 60 years old or over – if the benefit is from a capped defined benefit income stream.

If you have to withhold tax, you need to:

Provide information to the recipient of the benefit

When you pay a super benefit that contains an assessable amount you must give a payment summary to the recipient covering the details of the payment, including:

  • tax-free component
  • taxable component
  • tax offset (if applicable)
  • tax withheld (if applicable).

For income streams you must provide a PAYG payment summary by 14 July following the end of the financial year in which the payment was made.

For lump sums you must provide a PAYG payment summary within 14 days of making the lump sum payment.

You should provide a separate payment summary if:

  • they are receiving a superannuation income stream and the member is 59 years or younger
  • they are receiving a capped defined benefit income stream and the member is 60 or over and is in receipt of a capped defined benefit income stream
  • the member is 59 years or younger and is in receipt of a reversionary capped defined benefit income stream where the deceased was aged 60 or over at the time of death
  • a super lump sum was paid to    
    • a non-dependant in the event of another person's death
    • the trustee of a deceased estate.
     

Payment summaries should be issued in the situations listed above even if no tax has been withheld.

A payment summary is not required where a lump sum is paid to a member because of a terminal medical condition.

See also:

QC45251