The decision to tax your wages comes from the Australian Taxation Office (ATO) as a statutory legal requirement for all on-hire agencies operating in Australia. Wavelength is therefore following its lawful obligation as a labour-hire company.
The Australian Taxation Office website clearly defines our position as a labour-hire company and our requirement to withhold PAYG tax from payments to individual workers, including both contractors and employees.
The arrangement is shown below:
Labour-hire can be called different names, including:
- employment agent/agency
- contract management
- recruitment services
- group training organisations (where your business is referred to as the host employer).
Regardless of how the activity is described, if you supply the workers to another business, you must withhold from payments you make to individual workers.