If your business has employees or considering hiring direct employees (not contractors), it's crucial to understand whether you need to register for PAYG withholding.
Who Needs to Register for PAYG?
If your business employs individuals as direct employees, you are required to register for PAYG. This registration enables you to withhold the necessary PAYG tax from your employee's wages. It's important to note that this requirement does not apply to contractors.
Flexibility in Registration
If you're unsure about PAYG registration at the moment, don't worry. You have the flexibility to register later directly with the Australian Taxation Office (ATO). This means you can start PAYG withholding when it becomes necessary for your business.
Frequency of PAYG Payments
Once you're registered for PAYG, you'll need to determine the frequency at which you set aside money from your business earnings to pay your instalments to the ATO. You have two main options: monthly or quarterly.
While the choice ultimately depends on your business's financial situation and preferences, many businesses opt for making PAYG instalments on a quarterly basis.
How to Calculate GST
We have a whole article on how to calculate PAYG for your company available to read: Help calculating PAYG for an employee