Should tax be withheld on payment to foreign resident (individual) for referral fee?

 Author: JayATO(Community Support)Community Support

17 Apr 2026

Hi @Kitty88,

Yes, your client needs to withhold tax from the payment to the overseas individual. When a supplier doesn't provide an ABN and the total payment is more than $75 (excluding GST), you must withhold the top rate of tax from the payment and pay it to us.

Your client can request a statement by supplier to clarify the situation. The supplier may use the Statement by a supplier not quoting an ABN form or create a statement with the same information. This statement should explain why an ABN isn't required, such as if the payment is exempt income for the supplier or if the supplier isn't carrying on an enterprise in Australia.

If your client withholds tax from the payment, they must complete a payment summary and give it to the supplier at the same time they pay the net amount, or as soon as possible after. Your client needs to keep a copy of the payment summary to prepare their annual report for PAYG withholding where no ABN is quoted.

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