Calculating PAYG withholding
The easiest and quickest way to work out how much tax to withhold is to use our online tax withheld calculator. Alternatively, you can use the range of tax tables we produce.
These take into account the:
- tax-free threshhold
- Medicare levy
- study and training support loans.
If you withheld more tax than you should
Discovering your error early
If you withhold more tax than you should and you discover the error early, you must refund the extra amount you withheld to the payee, even if you have already paid the amount to us.
If you have already paid the amount to us, and you are:
- liable to pay us another withholding amount in the future, you can offset the amount against it. Remember to record this offset in your accounts.
- not liable to pay us any further withholding amounts for the relevant year, you need to lodge a revised activity statement by using Online services for business or using our self-help phone service for businesses.
Discovering your error late
If you withhold more tax than you should and you discover the error later than 30 June after the end of the financial year in which the withheld amount relates, do not refund the amounts to your payee – if you do, we cannot refund the amount to you.
To fix the error you need to:
- issue your payee with an amended payment summary
- complete and forward us an amended PAYG payment summary statement (NAT 3447)
If your payee has already lodged their income tax return for that financial year, they need to amend their tax return.