Small Business Tax Dictionary

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PAYG (Pay As You Go)

Pay As You Go (PAYG) is a system in Australia for paying amounts towards an individual's or business's expected annual income tax obligation. Under PAYG, tax is withheld from payments such as wages, pensions, or investment income throughout the year. It helps spread the tax liability over time, reducing the burden of a large annual payment. For businesses, PAYG includes withholding tax from employee payments and making regular contributions towards their own expected tax liability. Compliance with PAYG requirements is essential for individuals and businesses in Australia, ensuring timely and accurate tax payments.