## Documentation Index

Access the complete documentation index at:
https://www.zoho.com/au/books/help/llms.txt

Use this file to discover all available documentation pages before proceeding.

# PAYG Withholding Tax

When you pay your contractors and certain vendors in Australia, you must withhold a portion of the payment as tax and remit it to the Australian Taxation Office (ATO). PAYG withholding tax applies to specific payment types, and you must remit the withheld amount to the ATO by the required deadline to ensure compliance. With Zoho Books, you can enable PAYG withholding tax for your vendors and record it directly while creating purchase transactions.

## Enable PAYG Withholding Tax

To enable PAYG withholding tax in your Zoho Books organisation:

*   Go to **Settings**.
*   Under _Organization Settings_, select **PAYG Withholding** under _Taxes & Compliance_.
*   Enable the toggle next to _Do you want to enable PAYG Withholding?_

![Enable PAYG Withholding](/au/books/help/images/settings/enable-payg-withholding.png)

*   Click **Save**.

PAYG withholding tax will be enabled for your organisation.

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## Enable PAYG Withholding Tax for Vendors

To enable PAYG withholding tax for your vendors:

*   Go to _Purchases_ on the left sidebar and select **Vendors**.
*   Select the vendor for whom you want to enable PAYG withholding tax, and click **Edit** in the vendor’s details page.
    *   To create a new vendor and enable PAYG withholding tax for them, click **\+ New** in the top right corner.
*   In the next page, under _Other Details_, check the **Apply PAYG Withholding to this vendor**.

![Enable PAYG Withholding for Vendors](/au/books/help/images/settings/enable-payg-for-vendors.png)

*   Click **Save**.

PAYG withholding will be enabled for the selected vendor.

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## Withhold Taxes in Transactions

When you create a bill for vendor for whom you’ve enabled PAYG withholding, and record payment for the same, you’ll have an option to deduct PAYG withholding from the bill payment. Here’s how:

*   Go to _Purchases_ on the left sidebar and select **Bills**.
*   Select the bill for which you want to deduct PAYG withholding.
*   In the bill’s details page, click **Record Payment**.
*   In the payment page, enable **Deduct PAYG Withholding**.

![Deduct PAYG Withholding](/au/books/help/images/settings/deduct-payg-withholding.png)

*   Fill in the other required details.
*   Click **Save as Paid** or **Save as Draft** and mark it as paid later.

The payment will be recorded.

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## PAYG Withholding - Reports

Once you’ve recorded a bill and deducted the PAYG Withholding amount from the same, you can track it in  [PAYG Withholding Summary report](/au/books/help/reports/tax-reports.html#payg-withheld-summary). Here’s how:

*   Go to **Reports** on the left sidebar.
*   Scroll down to _Taxes_ and select **PAYG Withheld Summary**.

The list of transactions for which the PAYG withholding was deducted will be displayed.