Private ruling: PAYG Withholding obligations
Published: April 2014
Ruling period: Year ending 30 June 2014 | Year ending 30 June 2015 | Year ending 30 June 2016 | Year ending 30 June 2017 | Year ending 30 June 2018
Date scheme commenced: 1 July 2013

Ruling: Q1: Is there an obligation to withhold from payments made to members under section 12-35 of Schedule 1 of the Taxation Administration Act 1953 (TAA) | A1: No


Relevant legislative provisions: Taxation Administration Act 1953 Section 12-35 of Schedule 1

Reasons for decision: Detailed Reasoning - Pay As You Go (PAYG) withholding: Subdivision 12-B of Sch 1 to the TAA discusses payments for work and services. Specifically, section 12-35 of Sch 1 outlines payments to employees. It states an entity must withhold an amount from salary, wages, commission, bonuses or allowances it pays to an individual as an employee (whether of that or another entity). Paragraph 14 of Taxation Ruling TR 2005/16 states for the provision to apply, there must be an employee, a payment of salary, wages etc. to an employee as a consequence of his/her employment and finally, the payment must be made by the entity. In this case volunteers each receive a small cash payment. The Commissioner accepts that the volunteers are not employees as the activities are a social or personal pursuit of a non-commercial nature and constitute a pastime or hobby, with the payments received being from the pursuit of that pastime or hobby and not for being an employee. Consequently, there is no requirement to withhold from those payments under PAYG legislation.

Relevant facts: The entity conducts an activity. | Volunteers conduct minor activities for the entity. | The appointment of volunteers is administered by the entity. | Volunteers receive a small cash payment for activities they perform. | No other money or allowances are paid to the volunteers. | Volunteers are required to incur expenses on various items. | The payments are not intended to, nor do they cover expenses. | There is no formal contractual agreement between the entity and the volunteers.