Private ruling: PAYG withholding variation
Published: August 2013
Ruling period: Year ending 30 June 2014
Date scheme commenced: 1 July 2013

Ruling: Q1: Can Pay As You Go (PAYG) deduction on phone allowance for staff be varied to nil? | A1: No.

Relevant facts and circumstances: You pay your staff an annual allowance paid fortnightly to compensate them for business use of their mobile phones and their costs exceed this amount.

Relevant legislative provisions: Income Tax Assessment Act 1997 section 15-2

Reasons for decision: Summary: Cash allowances such as telephone allowances paid to employees are assessable under section 15-2 of the Income Tax Assessment Act 1997 . Table 1 of the PAYG Bulletin no.1 - taxing of allowances for the 2000/01 and future income years (PAYG Bulletin) identifies allowances paid for expected deductible expenses must have PAYG withheld. A variation of the amount formally required to be withheld under a withholding schedule may be granted if the allowance is identified in Table 2 of the PAYG Bulletin. In your circumstances a telephone allowance is an expected deductible allowance as identified in Table 1 of the PAYG Bulletin and therefore the PAYG withholding cannot be varied to nil.