PAYG stands for "Pay As You Go," a system used in Australia to manage tax payments.
This system is divided into two main processes: PAYG instalments and PAYG withholding. PAYG instalments are periodic payments made by businesses and individuals to cover their expected tax liability on income earned. It's a way to spread tax payments over the year, which can help with cash flow and budgeting.
On the other hand, PAYG withholding involves employers withholding tax from their employees' wages or salaries to cover their personal income tax liabilities. The withheld amounts are then remitted to the Australian Taxation Office (ATO). This method ensures that tax obligations are met incrementally throughout the year, rather than through a lump sum payment. It's important for businesses to comply with PAYG regulations to avoid penalties and ensure they are correctly collecting and remitting their employees' taxes.
If your company intends to employ staff and/or pay directors and shareholders a wage/salary, it must be PAYG registered. The ATO will advise how often it requires PAYG payments to be made; this is usually monthly or quarterly.
The estimated amount that you expect to withhold is generally an indication of the reporting frequency:
- $25 000 or less = quarterly
- $25 001 up to and including $1 000 000 = monthly
- More than $1 000 000 = increased frequency
How do I register?
To register your ABN for GST, simply contact Namecorp’s Support and Compliance Team either by phone on 1300 006 263 or via email at support@namecorp.com.au and they will organise everything for you over the phone.