Register for Pay As You Go (PAYG) withholding

When you make payments to employees and some contractors, you need to withhold an amount and send it to the Australian Taxation Office (ATO) at regular intervals. We call this Pay As You Go (PAYG) withholding.

You'll have withholding obligations if any of the following apply:

  • you have employees

  • you have other workers, such as contractors, and you enter into voluntary agreements to withhold amounts from your payments to them

  • you make payments to businesses that don't quote their Australian business number (ABN).

If you make payments subject to withholding, you must:

  • register for PAYG withholding with the ATO as soon as you know you need to withhold

  • withhold amounts from wages and other payments

  • lodge activity statements and pay the withheld amounts to the ATO

  • provide payment summaries to all employees and other payees by 14 July

  • provide a PAYG withholding payment summary annual report to the ATO by 14 August

PAYG instalments VS PAYG withholding explained

It's important to note that ​PAYG withholding is different to PAYG instalments.

If you're an employer, PAYG withholding is your legal requirement to keep a portion of payments made to your employees and other businesses, which you then pay to the ATO.

On the other hand, PAYG instalments allow you or your business to meet your income tax obligations.

PAYG instalments are generally paid by business owners, investors and sub-contractors who earn a certain amount of income.

What you need to do

If you don't already have an ABN, you can register for PAYG withholding atabr.gov.auExternal Link at the same time as you apply for an ABN, using the same form.

You should register once you know that you will be required to withhold an amount. You must apply to register by the day on which you are first required to withhold an amount from a payment.

If you have an ABN, you can register for PAYG withholding:

  • online through the Business Portal at bp.ato.gov.auExternal Link (you will need an AUSkey)

  • online through the Australian Business Register at abr.gov.auExternal Link (you will need an AUSkey)

  • by phoning 13 28 66

  • by completing Add a new business account (NAT 2954) – send your completed form to the address shown on the form

  • through your tax advisor.

In certain circumstances, you can register for PAYG withholding without having to obtain an ABN. This is generally for domestic employees, such as nannies. You will be issued with a withholding payer number (WPN).

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