Under the Taxation Administration Act 1953, employers are obligated to collect tax from payments made to employees and remit that tax to us. Employers must register with us under the PAYG withholding scheme to do this.
PAYG withholding provides an effective way for most people to meet their annual tax obligations. The withholding system also ensures we collect a more stable, secure source of revenue throughout the year, which supports a range of community services.
Key facts on PAYG withholding for the 2020–21 financial year include:
- There were over 1 million employers in Australia.
- Employers are expected to pay over $219 billion PAYG withholding to us.
- Employers are expected to pay about 98% of PAYG withholding voluntarily, without intervention from us.