• Add income tax withholding

    This screen enables you to add or re-activate your income tax withholding (ITW) details.

    The Business Portal determines your access rights and will only display the roles, branches and related information you are authorised to view and/or update.

    Re-activating tax types

    Tax types cannot be re-activated if there is currently an active tax type (of the same type) on any of your ‘Activity statement’ accounts. Your level of authorisation accesses under the portal may prevent you from viewing the role or account the tax types are attached to.

    ITW tax types can be re-activated if they have a status of cancelled (CAN) or inactive (INA). If the status is irregular (IRR) it can be updated.

    A tax type cannot be re-activated on the same day that it was cancelled.

    Requirement to register for ITW

    A ‘Yes’ or ‘No’ response is mandatory.

    You must register for ITW if you are required to withhold certain amounts from payments made to individuals, employees and others.

    Payments to individuals include:

    • salary and wages
    • director’s remuneration
    • sickness payments
    • return to work payments
    • eligible termination payments
    • accident payments
    • pension or annuity
    • unused leave.

    ITW also includes payments made under a voluntary agreement, labour hire arrangement, payments that have been specified by regulation, and personal services income attributed to an individual.

    Businesses must also withhold from a supplier when they don’t quote their ABN.

    Examples of other less common types of payments where withholding is required are:

    • income from a unit trust where dividend payments, interest payments or royalties are sent overseas
    • mining and natural resource payments
    • payments specified by regulation
    • payments to religious practitioners.

    More information about PAYG withholding (PAYGW)  

    Date withholding will commence

    The date that withholding commences is the date the first payment will be made and an amount withheld.

    A date must be entered, and it:

    • should be in the format dd/mm/yyyy
    • cannot be earlier than 1/7/2000
    • cannot be more than six months from today’s date.

    If a cancelled ITW tax type exists, the date of commencement for a new ITW tax type must be later than the date of cancellation of the cancelled tax type.

    Estimated number of employees

    This is the total number of individuals you think you will be making payments to. This information assists in the distribution of payment summaries at the end of the financial year. Do not include payments to people under a voluntary agreement or labour hire arrangements.

    Valid characters are 0-9.

    Annual withholding amounts

    This is an estimate of the amount you will withhold from all withholding payments annually. This information will be used in determining the frequency for making payments of the amounts withheld to the ATO.

    Valid characters are 0-9.

    Reporting method

    This is the method you will use to provide the ATO with your ITW payment summary annual report.

    A payment summary form is a form given to all employees and payees detailing total payments made and amounts of tax withheld each year.

    Make a selection from the drop down list. The following is an explanation of the methods available:

    Method  

    Explanation 

    Not yet decided.

    Unknown.

    ATO paper/Paper rep

    Report to the ATO on paper and give ATO payment summaries to payees.

    ATO paper/Elect rep

    Report to ATO electronically and give ATO payment summaries to payees.

    Self print/Elect rep

    Report to ATO electronically and print out payment summaries on plain paper to give to payees.

    Computer bureau

    Will use a payroll service or bureau.

    No summaries reqd

    Do not need to lodge payment summary annual report and do not require any payment summaries.

    Royalties

    This question seeks to establish whether you will pay royalties, dividends or interest to non-residents or report investment income paid to Australian residents.

    • A ‘Yes’ or ‘No’ response is mandatory.
      • If a ‘Yes’ is selected, the investment report type must also be selected.
    Investment report type

    This is the method you will use to report to the ATO payments of royalties, dividends or interest to non-residents or report investment income paid to Australian residents.

    Make a selection from the drop down list. The following is an explanation of the methods available:

    Method  

    Explanation 

    No investment report obligation

    The entity will not make investment type payments.

    Not yet decided

    Unknown.

    AIIR/Royalty - paper

    Report on paper (using ATO forms) both:

    • all investment income on an ‘Annual investment income report’ (AIIR)
    • royalties paid to non-residents.
     

    AIIR/Royalty - electronic

    Report electronically both:

    • all investment income in an ‘Annual investment income report’
    • royalties paid to non-residents.
     

    AIIR electronic

    Report electronically – all investment income in an ‘Annual investment income report’.

    Royalty electronic

    Report electronically - only dividend, interest and royalties paid to non-residents.

    AIIR elec/Royal pap

    Report electronically - investment income in an ‘Annual investment income report’, and

    Report on paper (using ATO forms) - royalties paid to non-residents.

    AIIR paper

    Report on paper (using ATO forms) - all investment income in an ‘Annual investment income report’.

    Royalty paper

    Report on paper (using ATO forms) - dividends, interest and royalties paid to non-residents.

    Main industry

    From the drop down list, select the main industry that you operate.

    Main activity

    Provide a description of the main activity from which you receive the majority of your business income.

    Valid characters are a-z and A-Z, and should not exceed 76 characters.

    To complete this transaction:

    For more information about the details displayed on the screen, refer to Definitions.

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Some of the advice and guidance on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our advice and guidance does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.

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© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).