From July 1 2019, if employers don’t meet PAYG Withholding (PAYGW) obligations for its workers, by not withholding tax from their payments and not reporting it to the ATO, they will lose a tax deduction.
This will apply to income tax returns lodged for the 2019/2020 financial year and beyond.
If you withhold tax from payments to workers, you must withhold the required amount and report correctly to the ATO in order to receive a tax deduction for your business.
PAYG withholding and reporting obligations apply to payments for:
- Salary, wages and other payments to employees
- Directors’ fees
- Religious practitioner payments
- Labour hire arrangements
- Voluntary withholding arrangements
- Payments to contractors with no ABN
The new rules are aimed at getting employers to report correctly and on time.
Once an employer has reported their PAYGW amount, it must then be paid to the ATO by the due date.
Book in a call with us to review your PAYGW reporting obligations to ensure you maximise your business tax deductions.