A pay-as-you-earn tax (PAYE), or pay-as-you-go (PAYG) is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns., PAYG-W stands for Pay As You Go Withholding. These are tax amounts that the employer withholds from their employees' salary and wages, to then be paid to the ATO on their behalf., The Pay as You Go (PAYG) withholding system can have considerable implications for both cash flow and tax planning. Developed by the Australian Taxation Office, the PAYG system requires employers to withhold income tax from employees’ wages and salaries and remit them directly to the ATO., What is Pay-as-you-go (PAYG) for Contractors? PAYG for contractors is a tax withholding system where employers deduct tax from payments made to contractors and remit it to the tax authorities on behalf of the contractor., Pay as you go (PAYG) is a withholding tax or payroll tax which requires you to pay incremental amounts of your business’s income to the ATO. These payments accumulate towards your expected end of year income tax liability and differ from employee to employee depending on their salary. ., .