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Changes to your client's PAYG withholding cycle

Your employer client’s pay as you go (PAYG) withholding cycle may change from 1 July.

Published 26 March 2024

Each year we review pay as you go (PAYG) withholding cycles to check if they need to be changed based on a business’s annual withholding amount.

During April, we’ll be writing to you and your clients if their PAYG withholding cycle is changing. If affected, your client’s reporting and paying obligations will change from 1 July.

Your client’s new withholding reporting and payment cycle will be based on the amount they withheld under all branches of their Australian business number (ABN) in 2022–23.

  • If your client withheld from $25,001 up to $1 million (medium withholder status), they’ll need to report and pay monthly.
  • If your client withheld more than $1 million (large withholder status), they’ll be given a new payment reference number (PRN) and will need to pay electronically using the new PRN on the set payment dates for large withholders.

For medium withholding clients, it’s important they report PAYG withholding amounts on their activity statement, pay by the due date and check that the stated withholding amounts match the amounts reported via Single Touch Payroll (STP).

Large withholders are not required to report PAYG withholding on their activity statement but should still reconcile their reported STP and paid amounts.

Your clients should make the necessary changes to their payroll software before 1 July, so their withholding reporting and payments align with the new due dates.

You, or your client, can ask to stay on their existing cycle if they estimate their 2024–25 PAYG withholding amount is less than the relevant threshold.

You or your client need to send a completed Request to review ATO initiated PAYG withholding cycle change formOpens in a new window to us within 14 days of receiving our letter. Ensure you provide the reason for their request, including what’s changed in their circumstances and the estimated amount they expect to withhold in 2024–25.

Remind your clients to report and pay by the new due dates.

See our website for more information about the ATO Annual review of PAYG withholding cycles and encourage your clients to review their record keeping practices.