Pay As You Go (PAYG) summaries will provide detailed accounting information about each payee, it makes filing your taxes easier because the calculations are already done, generating reports will be made simpler and faster, and giving a PAYG summary to your payees allows them to understand and clarify their payments with ease.
As a director, you might need to withhold amounts from payments that you make to your employees and contractors and send the withheld amount to the ATO. Your obligations depend on whether your worked is an employee or contractor. If it is an employee, you usually must withhold amounts from the payments that you make to them. If it is a contract, you usually don’t withhold amounts unless the request withholding by entering into a voluntary agreement with you.
You will usually only withhold amounts from your employees, your directors, business that don’t quote their ABN to you, or contracts who have voluntary agreements with you. You must withhold amounts from payments such as allowances, back payments, commissions, long service leave, holiday pay, repayment of an overpayment and payments when an employee leaves.
As a director, you have an obligation under the PAYG withholding rules to collect tax from the payments you make the employees and businesses to ensure they meet their end-of-year tax liabilities. You will have a withholding obligation if you employ people, employ other workers (contractors) or you make payments to businesses that don’t quote their ABN.
Paying PAYG as a director or business owner is an important aspect of running a business, if you have any questions, our team are always happy to help, give us a call on 1300 023 782 or email us at firstname.lastname@example.org. Craig Dangar can assist Directors wanting to understand their liabilities.