Pay As You Go (Payg) Voluntary Agreement

(a) „YES“ to this question, the recipient does not calculate GST for deliveries to which this agreement relates. A voluntary agreement is an agreement between a company (the payer) and a contract worker (Payee) to introduce work payments into the payroll system while you go (PAYG) withholding system. Payers are required to report annually on all payments made through voluntary agreements with us. We use this information to verify the information contained in the tax return. Download the voluntary agreement for the PAYG withholding form (NAT 2772 PDF 204KB). 1.52 In this event, businesses and individuals must consent to withholding payments. The agreement must be approved in accordance with Section 995-1 of ITAA 1997. The recipient of the payment must also have an ABN. This requirement will ensure that beneficiaries who would otherwise be subject to the new rate regime as commercial taxpayers will be covered by the deduction.

[point 9 of Appendix 3; new paragraphs 12-55 (1)) (c) and d)] 1.88 Another example of a stand-alone priority rule is the new paragraph 12-55 (1) (b) which provides that the deduction for the voluntary agreement event can only take place if the corresponding payment is not subject to any other withholding event. 1.32 All three cases are explained in the presentation of the amendments below. The new rules, which provide for voluntary agreements, are similar to those recently introduced in the SPA. If the beneficiary is not aware of the IRB at the time of the agreement, the 20% package applies. Payg deduction – voluntary agreements (NAT 3063). 1.53 Both contracting parties are required to keep a copy of the agreement while the agreement enters into force and 5 years after the last payment under the agreement. In order to reduce compliance costs, the agreement does not need to be submitted to the Commissioner. The 5-year registration requirement is consistent with the general registration requirements described in Section 262A of ITAA 1936.

[New subsection 12-55 (2)] Businesses and some independents may enter into voluntary payg agreements to contribute individuals to the withholding system if no other PAYG deductions are applicable. 3.39 Allow tax payers to make voluntary payments for expected tax debts.