A withholding tax is a tax withheld from wages and paid directly to the government by an employer.
In the case where a business purchases goods and services from a supplier that does not quote an ABN, the business is required to withhold a percentage of the total payment of the tax invoice.
To withhold these monies, you must be registered for Withholding.
- At the Home screen, click on Cashbook > Transactions.
- The Enter Cashbook Transaction window will be displayed. Add a new transaction by clicking the Add New button.
- The Enter Cashbook Transactions window will display.
- Format: When you start a new transaction, by default transaction format is set at POST GST transaction. Select the Withholding tax – no ABN from the dropdown list.
- Choosing this format will activate a new blank record ready for you to enter the transaction details.
- In the example below, we have used the code for Repairs Plant/Mach for $500. Using the Withholding tax – no ABN Format, Agrimaster automatically:
- Adds a second Split line with the code Withholding Tax.
- Deducts 49% of the total invoice amount.
- The results from the transaction are reported on the Withholding Tax Deductions (Details) Report and are included in the BAS.