New PAYG withholding tax rules for business 16th July, 2019 | permalink The ATO has tightened up its PAYG withholding tax and reporting rules. Don’t lose a tax deduction for non-compliant payments to workers. If you’re running a business, did you know a new law came into force on 1 July that may affect your ability to claim tax deductions for workers? The new law requires you to withhold and report tax for workers as you go – or miss out on tax deductions. The PAYG rules require that you: withhold the tax amount from the payment before you pay your worker; and report that amount to the ATO – in a Business Activity Statement. This includes payments: of salary, wages, commissions, bonuses or allowances to employees of directors’ fees under a labour hire agreement; and for a supply of services (except supplies of goods and real property) where the contractor has not provided their ABN. You can no longer wait until the end of the financial year. PSZ advises that the new law means you should review all payments to employees, contractors, labour hire workers and directors to ensure withholding obligations are being met. It’s also a good time to review the status of any contractors. Are they actually contractors or employees? Please contact us at PSZ Accounting if you have any questions or concerns about this new initiative.