Changes to deductions for non-compliant payments to workers

Written by: Rob Boon

The rules for claiming deductions for payments to workers are changing. From 1 July 2019, employers can only claim deductions for payments made to workers where they’ve met the pay as you go (PAYG) withholding obligation for that payment.

Where the PAYG withholding rules require an amount to be withheld, employers must:

  • withhold the amount from the payment before they pay their worker
  • report that amount to the ATO.

Employers won’t lose their deduction if they withhold:

  • an incorrect amount by mistake – to minimise any penalties mistakes can be corrected by lodging a voluntary disclosure in the approved form.
  • the correct amount but make a mistake when reporting – mistakes are to be corrected as soon as possible.

Employers will only lose their deduction if there is a withholding or reporting requirement and no amount is withheld or reported to the ATO, unless the employer makes a voluntary disclosure in the approved form before being told by the ATO or before an examination of the employers’ affairs has begun.

This change is part of the government response to recommendations from the Black Economy Taskforce.

See also:

Previous Articles

If you enjoyed this article and would like to see others, then click on the link below.

Accountability BAS and Bookkeeping Services provide professional bookkeeping and BAS services to businesses in most Australian states.

What our clients say about us…

“I had the pleasure of being introduced to ABBS through Jo Bacon the WA representative. The professional service.  I have received has been so essential in assisting me with my new business, I am so grateful for the expertise, professionalism and excellent customer service I have experienced.” Marion B

“Thanks to Steve Cocks from ABBS we managed to get all the books up to date and in no time, … and that took the weight off my shoulders so I could focus on developing my business and moving forward in a more organized and structured way, keeping on top of things every month which makes life much easier.”  Elisabeth G

“As an ex-bookkeeper, I’m pretty fussy about how I like things done and I’ve found Caran from ABBS to be a pleasure to work with. She’s competent and efficient and now that I have her helping me with the bookkeeping for my business, I wouldn’t be without her.”  Sandy T