Employers are required to withhold amounts paid to employees and regularly send these payments to the Tax Office. This system is called PAYG Withholding.
Under PAYG withholding, businesses and other enterprises must deduct amounts from certain payments they make to others, including payments:
To employees, company directors, and office holders
Under labour hire arrangements
Under voluntary agreements
Made because a person is unable to work (eg due to sickness or accident)
Where an Australian Business Number (ABN) has not been quoted