If you are a business owner you’ve probably heard of PAYG and that it stands for Pay As You Go. But, are you familiar with the meaning of PAYG in Australia? Do you know how it can affect your business? Do you know that it is used for two different processes by the ATO (Australian Tax Office) for businesses: PAYG withholding and PAYG installments?
If not, you’re in the right place. Here, at Syndeo Group, we pride ourselves on providing the best professional services in accounting and taxation, superannuation and management consulting in Brisbane and the surrounding areas. And, luckily for you and all other small business owners, our taxation services also include Pay As You Go, plus the following:
- Business Income Tax advice;
- Business structure advice and implementation;
- Income Tax return preparation and lodgment;
- Goods & Services Tax advice;
- Business and Pay As You Go Activity Statement preparation and lodgment;
- Fringe Benefits Tax advice;
- FBT Return preparation and lodgment;
- Capital Gains Tax advice;
- Payroll Tax advice (including Single Touch Payroll);
- General advice regarding other indirect taxes; and
- Tax debt management.
Now, let’s have a closer look at the two different systems – PAYG installments and PAYG withholding:
This process enables you and your business to make quarterly payments and thus meet your obligations regarding your income tax. These payments at the end of each quarter of the year go towards the income tax obligation from your business and investment income for that financial year. In general, this system applies to individuals, trusts, or organisations, i.e. everyone who earns a certain amount of outcome.
However, you must note that there are certain rules, and also exceptions, that apply to PAYG installments based on the type of business and company structures, primary producers, and consolidated groups. To get more information on these special rules and requirements, don’t hesitate – seek professional help from the number one – Syndeo Group accountants.
PAYG withholding enables you and your business to pay your employee’s or contractor’s income tax obligation on their behalf. Your company is required to withhold a certain amount of their payment and send it to the ATO regularly. Plus, if you make any payments to businesses that don’t state their ABN (Australian Business Number), registration with the system is obligatory.
Additionally, it is worth mentioning that at the end of the financial year, employees can make a claim against the amount withheld by your business in their personal tax return if they earn less than the tax-free threshold.
In short, the Australian taxation system may be tricky to navigate. Fortunately, the highly-experienced and qualified accountants and tax agents at Syndeo Group can take care of your tax requirements completely. So, make your life easier and contact us today!