Show download pdf controls
  • PAYG withholding – correcting mistakes

    To correct a mistake in the pay as you go (PAYG) withholding amount reported on your activity statement, you need to revise the original activity statement. If you failed to report an amount not withheld when it should have been, you can write to us.

    On this page:

    Failure to withhold

    To correct a mistake when you did not withhold PAYG withholding amounts from a payment, or you withheld the wrong amount, you need to write to us. You should not include any amount that you failed to withhold on either an original or a revised activity statement or make a correction to information reported through Single Touch Payroll (STP) unless advised to by us.

    By writing to us, you are making a voluntary disclosure which gives you the opportunity to correct your tax obligations. If you have failed to withhold an amount you could lose your deduction unless you make a voluntary disclosure.

    To find out how to write to us, see What to include in your letter.

    Failure to notify

    If you withheld the correct amount of PAYG withholding, but made a mistake reporting it, or failed to report it when you should have, you need to lodge a revised activity statement and correct information reported through STP.

    To correct a mistake where PAYG withholding amounts were overstated, you need to lodge a revised activity statement and correct information reported through STP.

    Voluntary disclosure

    You may have to pay a penalty and may lose your deduction for a payment if you:

    • didn't withhold an amount from a payment
    • made a mistake reporting
    • failed to report.

    To avoid a penalty, make a voluntary disclosure before we commence an audit or other compliance activity involving your PAYG withholding obligations or deduction claims.

    We will generally treat your revised activity statement or your letter as a voluntary disclosure.

    See also:

    What to include in your letter

    When you write to advise us of an amount you didn't withhold from a payment, include the following information:

    • the title 'Voluntary disclosure – PAYG withholding'
    • your name or your business name – that is, the full name of the taxpayer that should have withheld the amount
    • your phone number and address, or the name, phone number and address of your authorised contact or tax agent
    • the name of the person or organisation you made the payment to
    • the date you made the payment
    • what the payment amount was
    • what the amount you should have withheld was, or an estimate of what it should have been
    • a signed and dated declaration as follows
      • I declare the information I have given in this letter, including attachments, is true and correct and that I am authorised to disclose this information
      • your signature
      • the date.
       

    Keep a copy of the letter for your records.

    Mail your letter to us at:

    Australian Taxation Office
    PO Box 3575
    ALBURY  NSW  2640

    Your tax agent can also make a voluntary disclosure on your behalf by sending the required information though an ATO approved electronic channel. The tax agent will need to ensure that their tax agent number is linked to your records.

    Income statement and payment summary corrections

    Whatever the mistake, if you've finalised STP records or issued payment summaries to your payees for the period in which the error was made, you may need to correct them.

    If you identify the need to amend details after making a finalisation declaration you should submit these amendments as soon as possible. You can do this by submitting an update event.

    Submitting an update event will ensure the correct information is reflected in your employee's income statement.

    If you have issued payment summaries for amounts not reported through STP, you will also need to revise your payment summary statement or payment summary annual report, or both.

    See also:

    Last modified: 16 Dec 2019QC 33789