What Business Owners Should Know About PAYG Withholding
Owning and operating a business, you already know there are certain costs associated with keeping you up and running. One responsibility of a business owner is to collect the PAYG (Pay as You Go) withholding. As a business owner, you have an obligation to college tax from any payments you will make to your employees and even some businesses – this is so that they will then be able to meet their end-of-year tax liabilities.
Your business will be responsible for any PAYG withholding obligations if you have any of the following:
• You employee any workers
• Other works like contractors who have voluntary agreements with you
• You make any payments to any businesses which do not have their business number quoted
As a business, you need to apply and register for PAYG withholding before you have to withhold any payment. As an employer, you will have other legal obligations aside from tax obligations. You must make sure that you only employ legal workers, which include citizens and permanent residents, or those who are non-citizens with visas which permit them to work.
How to Register for PAYG Withholding
There are a few different ways you can register. You must make sure you register by the days which are first needing to withhold payment from your employees or businesses. If registering through a tax agent, like Femia Accountants, you will want to make sure you have your business number available so that they can properly process your request.
If you own or operate your business as a partnership or sole trader and you then draw any amount from your business, this is not considered to be a wage. You will not have to withhold payments from these drawings that take place.
Records that Must Be Kept
You must maintain a record of all PAYG withholding transactions that you have for up to five years’ time. You will want to make sure they are documented either in writing or with electronic documentation. You can even choose to keep any electronic images as a part of your paper records. Images must be sure to be a clear reproduction of the original papers and can be read by the tax agents.
Conclusion
When it comes to PAY with holding payments, it can be a bit confusing in the beginning. It’s important to discuss any questions you may have with one of the tax agents of Femia Accountants, to let them know your concerns or to ask how you go about starting the process of participating in any PAYG withholding payments.
For your employees or workers you will want to discuss with them ahead of time about the PAYG withholding payments. This will fully prepare them for any payments being taken from them, so they are not unexpected.