PAYG Registration for Tax Agents

PAYG registration for a client’s first payroll means adding PAYG withholding through your authorised ATO agent access before the first relevant payment. Confirm the payer and start date, then check that the withholding role appears before closing the registration task.

Confirm Which PAYG Registration the Client Needs

Register the entity making payments subject to PAYG withholding, including payments where the amount withheld is zero. The ATO’s registration guidance sets that timing rule.

PAYG withholding collects tax from payments to other people. Common triggers include employee wages, directors’ remuneration and payments under a contractor’s voluntary withholding agreement. Payments to suppliers who do not quote an ABN can also trigger withholding, subject to the applicable exceptions.

PAYG instalments prepay tax on the client’s own business and investment income. A client can have both obligations. A sole trader’s personal drawings do not become employee wages because the bank description says “salary”.

Compare these two setup decisions:

• Incorrect: the client has PAYG instalments, so the first employee’s withholding registration is marked complete.
• Correct: the agent checks for an existing PAYG withholding role under the actual employer and adds it only if needed.

Check the legal payer against the engagement and payroll file. Record its existing ABN or withholding payer details, the first relevant payment date and any existing withholding role. A director’s personal account and their company’s account belong to different taxpayers.

If the payer does not need an ABN, use the non-ABN route. The withholding payer number guide explains the identifier and application details.

Collect Authority and Registration Details

Obtain written client instructions covering the payer, requested registration date and work you will handle. Set out who runs payroll, reports to the ATO and arranges payment. Complete your identity and authority checks before acting.

Confirm that your agent access covers the relevant client account. Where the ATO requires client nomination, the client completes it before you add the authorised account. The ATO’s linking instructions distinguish the client’s nomination from your action afterwards.

Prepare the following details before opening the registration request:

• The payer’s legal name and existing identifiers, matched to its authorised tax record.
• The expected first payment subject to withholding and the requested start date.
• Business or residential address, postal address and contact details.
• The authorised contact’s details and your agent registration number where requested.
• Expected withholding over the next 12 months and the number of employees or other payees.
• The payment activities involved, including any relevant non-resident payments or working holiday maker employment.

These are preparation checks. Complete the mandatory fields shown for that client and route. The ATO’s non-ABN application asks for contact and withholding activity details as well as the commencement date.

Resolve an entity mismatch before applying. For example, if the engagement names a sole trader but the employment contract names a company, confirm which entity employs the worker. Correct the engagement and payroll file to match the established payer before selecting its ATO account.

Register Through the Authorised Agent Route

For an existing ABN holder, use the tax registration function in Online services for agents. The ATO agent user guide gives this sequence:

1. Select the client, then open Profile and Tax registrations.
2. Choose the relevant Account and check Current registrations for an existing withholding role.
3. Select Add and choose PAYG withholding as the registration type.
4. Complete the mandatory fields and select Next.
5. Check the request, accept the authorisation Declaration and select Submit.
6. Reopen current registrations and record the withholding role and effective date. Save any receipt or reference shown.

The online function permits a PAYG withholding registration for the current monthly or quarterly period. It does not permit backdating. Contact the ATO when the required start falls outside that function’s permitted period. Keep the actual first-payment date in your request.

Payers Without an ABN

A payer who does not need an ABN can register through the ATO business line or with form NAT 3377. Do not use NAT 3377 for a payer who already has an ABN.

1. Complete the payer and withholding details in NAT 3377, including the authorised contact and agent details where applicable.
2. Arrange the required declaration and send the form using its return instructions. Keep a signed copy and dispatch record.
3. Record the ATO’s confirmation and issued withholding payer number before treating registration as accepted.

The form permits a commencement date up to six months ahead, but says processing waits until that nominated date. Build that timing into the payroll setup task.

When Confirmation Is Missing

Keep an application marked “submitted” until the tax record or ATO confirmation establishes registration. A saved form or dispatch receipt proves that you sent a request.

If the role is absent, check the selected entity, account and effective date first. Review the response for an error or request for information. If the request remains unresolved, contact the ATO through your authorised agent channel with the request reference and payer details. Keep a follow-up owner on the task and avoid lodging a duplicate application.

Finish the Payroll and BAS Setup

Use the confirmed payer details and effective date to finish the payroll file and schedule the first reporting task. Government PAYG withholding guidance explains the reporting and payment obligations that follow registration.

Record the ATO’s reporting frequency and payment details in the client file. Assign responsibility for payroll reporting, activity-statement preparation and payment approval. Single Touch Payroll reporting and paying withheld tax are separate actions.

Check the first activity statement against the confirmed role and reporting period. Deal with a missing or incorrect obligation through the ATO before leaving the job unassigned. Keep any separate GST registration task under its own status. Adding withholding does not establish the client’s GST status.

Fictional First-Employee Example

A company’s director instructs a BAS agent in writing to register the company before its first employee is paid. The engagement assigns payroll preparation to the agent and payment approval to the director.

The agent matches the employer to the company’s ATO account. There is no existing withholding role. After completing agent linking, the agent adds PAYG withholding for the permitted commencement period and saves the resulting confirmation.

The agent then records the active role and effective date in the payroll file. The first payroll reporting task goes to the agent. The first activity-statement job carries the ATO’s confirmed reporting period, with the director responsible for approving payment.

That handover prevents registration from becoming a completed task with nobody assigned to the first report. Use the payroll software guide when setting up the payroll file or handing it to another operator.

Cancel the Role When Withholding Ends

Cancel PAYG withholding when the client no longer needs the role, after accounting for final employee entitlements and any other withholding payments. A final pay run does not cancel the ATO registration.

1. Obtain instructions confirming that withholding has ended and record the requested cancellation date. Check for remaining director payments, contractor agreements or other withholding obligations.
2. Reconcile payroll and withheld amounts. Complete final reporting, including STP finalisation where required. Identify outstanding activity statements or payments.
3. In Online services for agents, select the client, then Profile, Tax registrations and the relevant account.
4. Select Cancel beside the PAYG withholding registration. Complete the mandatory fields, select Next and follow the remaining confirmation prompts.
5. Check Historical registrations for the cancelled role and its end date. Retain the confirmation and resolve any outstanding obligation separately.

For a non-ABN payer, use the ATO’s cancellation route for that account. Its guidance provides the business line and form NAT 2955 as alternatives when an online cancellation is unavailable.

The government’s business closure guidance covers final STP reporting, outstanding tax obligations and record retention. Keep the client instructions and cancellation evidence with the final payroll reports, reconciliations and lodgment receipts. Retain records under the applicable tax and employment rules after the role ends.

PAYG withholding cancellation leaves separate GST, ABN and company decisions to their own procedures. Confirm the cancelled withholding role in the authorised tax record, then close its recurring jobs only after the remaining reporting and payment work has an owner.