Under PAYG withholding, you need to withhold tax from certain payments made to others. This includes payments:
- to employees, company directors and office holders
- to workers under labour-hire agreements
- under voluntary agreements
- where an Australian business number (ABN) has not been quoted in relation to a supply.
You must report any withheld amounts in the PAYG tax withheld section of your business activity statement (BAS) and pay all withheld amounts to us.
For help when reporting, see our resources:
- PAYG withholding – how to complete your activity statement labels
- Removing tax deductibility of non-compliant payments
- ATO PAYG withholding pre-fill for activity statements
If you fail to comply with the PAYG withholding obligations for a payment to a worker, you may not be entitled to a deduction for that payment. Penalties may also apply.
How to complete labels W1, W2, W3, W4, W5 and 4 on your BAS.