PAYG Withholding

Employers are required to withhold amounts paid to employees and regularly send those payments to the Tax Office. This system is called PAYG Withholding.

Under PAYG withholding, businesses and other enterprises must deduct amounts from certain payments they make to others, including:

• payments to employees, company directors and office holders
• payments under labour hire arrangements
• payments under voluntary agreements and
• payments where an Australian Business Number (ABN) has not been quoted.

The due date for paying amounts withheld to the Tax Office depends on the size business you have:

• A small business has a total annual withholding of $25,000 or less, and is required to pay withholding amounts quarterly.
• A medium business has a total annual withholding of between $25,001 and $1 million, and is required to pay withholding amounts monthly.
• A large has a total annual withholding exceeding $1 million, and should refer to the Large withholders guide to PAYG Withholding for full details of their obligations.

For PAYG Withholding rates, please refer to the ATO website.

Further information about PAYG Withholding is also available at the ATO website.

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