W4 — Withholding where no ABN was quoted¶

W4 – Withholding where no ABN was quoted is a PAYG withholding label on your BAS. It applies when a supplier sends you an invoice for a taxable supply but does not give you their ABN. In that case you generally have to hold back part of the payment and send it to the ATO — then report that held-back amount at W4.

The BAS is the business activity statement you send to the Australian Taxation Office (ATO). An ABN is an Australian business number, the number a business quotes so you know it is registered. A taxable supply is simply a sale of goods or services in the course of running a business.

In one line

If a supplier does not quote an ABN on an invoice for a taxable supply, you generally withhold at the top rate (47%), send it to the ATO, and report it at W4.

Why this matters¶

If a supplier leaves their ABN off the invoice and you pay the full amount anyway, you can be caught short — the rules say you should have held some back. Knowing when W4 applies protects you and keeps your BAS correct. In practice it comes up rarely, because most business suppliers quote their ABN.

What you will learn¶

What the W4 no-ABN withholding label is
When you must withhold at the top rate from a supplier
The common exceptions where you do not withhold

Understanding the concept¶

When another business sells you something for your business, they should quote their ABN on the invoice. If they do not, the ATO says you generally have to withhold an amount from the payment and send it to the ATO, rather than paying the supplier in full.

The rate you withhold is the top rate — the ATO states this is 47% of the payment (from 1 July 2017). You report the total you withheld this way at W4.

There are common exceptions where you do not have to withhold, even if there is no ABN. The ATO lists these, and they include:

Small payments — supplies where the total is $75 or less (excluding GST).
Private or domestic supplies — where the supplier gives you a written statement that the supply is of a private or domestic nature, or is a hobby.
Certain other cases the ATO sets out (for example where the supplier is not entitled to an ABN).

If an exception applies, you pay the supplier in full and there is nothing to report at W4. If none applies and no ABN is quoted, you withhold at the top rate.

For accountants & bookkeepers

The no-ABN withholding rule sits under PAYG withholding, separate from wages (W2) and other withholding (W3). The ATO sets the rate at 47% of the payment (from 1 July 2017). A supplier can avoid withholding on genuine private, domestic or hobby supplies by giving the payer a "Statement by a supplier" form. Where the payer withholds, they issue the supplier a payment summary for withholding where an ABN was not quoted, and the supplier claims the amount as a credit in their income tax return. The withheld amount is remitted to the ATO with the activity statement.

Example¶

Sam runs a small landscaping business and hires a casual contractor for a one-off job. The contractor sends an invoice for $2,000 for a taxable supply but forgets to include an ABN. None of the exceptions apply — it is a business supply well over $75 and it is not private or domestic. So Sam has to withhold at the top rate of 47%, which is $940, pay the contractor the remaining $1,060, and send the $940 to the ATO. When Sam completes the BAS, the $940 is reported at W4. If the contractor had simply quoted an ABN on the invoice, Sam would have paid the full $2,000 and W4 would stay blank.

Common mistakes¶

Paying a no-ABN invoice in full when none of the exceptions apply — you generally have to withhold at the top rate first.
Withholding on a small supply of $75 or less (excluding GST) — that is an exception.
Confusing W4 with W2 — W4 is supplier no-ABN withholding, W2 is wages withholding.

How this works in myaccountant¶

In the app — myaccountant prepares your BAS from your own records and shows the PAYG withholding labels, including W4, on the statement you review. Because most suppliers quote their ABN, W4 usually sits at nil unless you have recorded a payment where an ABN was missing.

Key points¶

W4 is for amounts withheld from suppliers who did not quote an ABN.
It applies to invoices for a taxable supply with no ABN shown.
The withholding rate is the top rate — 47% (from 1 July 2017).
Small payments of $75 or less (excluding GST) are an exception.
Genuine private, domestic or hobby supplies can be an exception with a written statement.
If no exception applies, withhold, send it to the ATO, and report it at W4.

Learn next¶

General information only — not tax, super or financial advice.

Did this answer your question?