You will have additional pay as you go (PAYG) withholding obligations if the PSI your business received was not promptly paid as salary or wages to each individual who performed the service. Promptly paid means paying an amount by the 14th day after the relevant PAYG payment period during which the PSI was received by your business.

If your business has a net PSI loss for an income year, there are no additional PAYG withholding obligations, as there is no income to attribute.

If you’re registered for PAYG instalments, any PSI attributed may affect your instalment income.

Any additional PAYG withholding obligations will depend on the circumstances of your business.

For companies and trusts there are:

• normal PAYG withholding obligations for salary or wages promptly paid to each individual who produced the PSI
• additional PAYG withholding obligations for amounts attributed to each individual who produced PSI which was not promptly paid as salary or wages.

For partnerships:

• there are no normal PAYG withholding obligations for amounts paid to partners, because partnerships cannot pay salary or wages to partners
• there are additional PAYG withholding obligations for amounts attributed to a partner who produced PSI.

Your business cannot enter into a PAYG withholding voluntary agreement if there are additional obligations.

These additional PAYG withholding obligations will continue until your circumstances change and the PSI rules no longer apply.

Example

You worked out last income year that the PSI rules applied, your business would have additional PAYG withholding obligations in the current financial year unless:

• all PSI is promptly paid out as salary or wages and appropriate PAYG amounts are withheld from the payments
• you worked out that the PSI rules do not apply to that income
• you received a PSB determination from the Commissioner of Taxation stating the PSI rules do not apply to that income.

For a new business, or one that has not received PSI previously, the additional obligations occur when your business attributes the PSI in the current income year.