Source: ATO – Changes to deductions for non-compliant payments to workers
The rules for claiming deductions for payments to workers are changing.
From 1 July 2019, you can only claim deductions for payments made to your workers where you have met the pay as you go (PAYG) withholding obligation for that payment. This change is part of the government response to recommendations from the Black Economy Taskforce.
Where the PAYG withholding rules require an amount to be withheld, you must:
- withhold the amount from the payment before you pay your worker
- report that amount to us.
You won’t lose your deduction if you:
- withhold an incorrect amount by mistake – to minimise any penalties you can correct your mistake by lodging a voluntary disclosure in the approved form
- withhold the correct amount but made a mistake when reporting – correct your mistake as soon as possible.
If there is a withholding or reporting requirement and no amount is withheld or reported to us, you will lose your deduction unless you make a voluntary disclosure in the approved form before we let you know we’ve begun an examination of your affairs.