Is your SMSF meeting its PAYG obligations?

Is your SMSF meeting its PAYG obligations?


The ATO has called on self-managed funds to check whether they are meeting new pay-as-you-go (PAYG) withholding obligations for capped defined benefit income streams paid to their members.

SMSFs have PAYG obligations to withhold tax from income streams that have been paid to their members in circumstances where:

  • The member is 60 years or older.
  • The member is under 60 years and has a death benefit capped defined income stream (where the deceased was 60 years or over when they died).

If you have no tax that you need to withhold from a member’s super, then you are required to provide the individual with a pension payment summary and lodge a PAYG withholding summary with the ATO. This should be done by 14 August, following the end of the financial year that the payment was made.

SMSF trustees who are paying a capped defined benefit income stream to a member must ensure to meet all obligations. These include registering for PAYG, providing your member and the ATO with payment summary information, and making sure to comply with the withholding obligations of your activity statement.

Members can use the ATO’s defined benefit income cap tool to understand if and how the income from these pensions should be included in their assessable income. If further clarification on these obligations is required, you should consult your financial advisor.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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