PAYG Payment Summary

A PAYG payment summary, also known as a pay as you go payment summary or a group certificate, is a document that displays the total amount of tax withheld from an employee’s salary or wages over the course of a financial year. It is the employer’s responsibility to furnish this document to each employee by July 14th annually.

The payment summary should include the following details:

• Employee’s name and address
• Employer’s name and address
• The total amount of salary or wages paid to the employee during the financial year
• The total amount of tax withheld from the employee’s salary or wages during the financial year.

As an employer, it is essential to provide payment summaries to your payees, detailing their payments and the amount withheld during the financial year. 

Methods of Providing Payment Summaries

Employers have the option to provide payment summaries either electronically or on paper. Electronic submission can be made by referring to the guidelines outlined for PAYG payment summaries. Paper forms can be ordered at any time using the online ordering service.

Reporting through Single Touch Payroll (STP)

If you report and finalize the payment information through STP, you are not obligated to provide a payment summary to the employee for the amounts reported. However, payment summaries are still required for payments that are not reported through STP.

Types of PAYG Payment Summaries

There are different types of PAYG Payment Summaries. The types have been classified based on the following criteria:

• The type of income being reported:Some payment summaries are used to report employment income, while others are used to report business income, superannuation income, or other types of income.
• The source of the income: Some payment summaries are issued by employers, while others are issued by other payers, such as banks or investment companies.
• The purpose of the payment summary:Some payment summaries are used for tax reporting purposes, while others are used for administrative purposes, such as calculating superannuation entitlements.

Commonly Used Payment Summaries

Payment Summary For Workers

There are several payment summaries frequently used for workers, including:

• PAYG Payment Summary – Individual Non-Business (NAT 0046)
• PAYG Payment Summary – Business and Personal Services Income (NAT 72545)
• PAYG Payment Summary – Superannuation Lump Sum (NAT 70947)

Payment Summary for Employment Termination Payment (ETP)

If you have made an employment termination payment (ETP) to a worker, you must provide them with a PAYG Payment Summary – Employment Termination Payment (NAT 70868) within 14 days of making the payment.

Payment Summaries for Payments without Quoted ABN

If you have withheld tax from a payment due to another business not providing an Australian Business Number (ABN), you must issue a payment summary to them detailing the payment. 

You can use the form PAYG Payment Summary – Withholding where ABN Not Quoted or create your own, ensuring all necessary details are included. This payment summary should be provided at the time of payment or promptly afterward.

Electronic Payment Summaries

When you submit your PAYG withholding reports online, you can give electronic payment summaries to your workers. However, there are specific requirements that need to be fulfilled in order to provide electronic payment summaries:

• The payment summaries must be non-editable.
• They should be easily printable in high quality for readability.
• You must offer your workers the choice to receive either an electronic or paper payment summary.
• Inform your workers about the availability of payment summaries, and instruct them on how to access and print them.
• Ensure the chosen method for distributing electronic payment summaries is secure enough to protect sensitive information such as tax file numbers and personal details.

Types of payment summaries that can be provided electronically include:

• PAYG Payment Summary – Individual Non-Business (NAT 0046)
• PAYG Payment Summary – Foreign Employment (NAT 73297)
• PAYG Payment Summary – Business and Personal Services Income (NAT 72545)
• PAYG Payment Summary – Employment Termination Payment (NAT 70868)
• PAYG Payment Summary – Superannuation Lump Sum (NAT 70947)
• PAYG Payment Summary – Superannuation Income Stream (NAT 70987)
• PAYG Payment Summary – Where ABN Not Quoted (NAT 3283).

Part-Year Payment Summaries

Workers have the option to request a part-year payment summary by submitting a written request before June 9th, which is 21 days before the end of the financial year. If such a request is received, the employer must provide the requested payment summary within 14 days.

However, there is an exception if the worker has received a reportable fringe benefits tax, as this can only be calculated at the conclusion of the fringe benefits tax year.

In such cases, the employer must provide the part-year payment summary after the calculation of the fringe benefits tax is completed.

Part-year payment summaries include details of withholding payments made from either:

• July 1st of that financial year until the date of issue of the payment summary.
• The date of issue of any previous part-year payment summary until the date of issue of the current one.

Amended Payment Summary

Providing payment summaries to all employees is crucial, even if no tax was withheld. In case any of the following details on the issued payment summary are incorrect, an amended payment summary must be provided to the payee:

• Payment amount
• Tax withheld amount
• Payment codes
• Tax file number

By adhering to these guidelines and providing accurate payment summaries, employers fulfill their obligations and enable workers to reconcile their income and taxes effectively.