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The Tax Office has revealed it is making changes to the PAYG withholding cycle this month, effective from 1 July.
Tax Office issues notice on looming changes to PAYG withholding cycle
07 April 2025
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7 minute read
The ATO is reminding business owners to check potential changes to their pay-as-you-go (PAYG) withholding cycle, as reviews and changes will be made over the course of April.
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According to the ATO, each year it reviewed PAYG withholding cycles to check if they needed to be changed based on a business’s annual withholding amount.
“During April, we’ll be writing to you if your PAYG withholding cycle is going to change. If affected, your reporting and payment obligations will change from 1 July 2025,” it said.
“We’ll change your withholding, reporting and payment cycle if your annual withholding payments in all branches have increased.”
If changes to a withholding status were due to change, business owners were urged to make changes to their payroll software before 1 July 2025 to align withholding reporting and payments with the new due dates.
Business owners who had an annual withholding amount between $25,000 and $1 million – medium withholder status – would be required to report on their activity statement and pay monthly.
Businesses with large withholder status, with an annual withholding amount of more than $1 million, would be required to pay electronically within six to eight days from the day the amount was withheld, for example, when staff were paid.
The ATO said these businesses were set to receive a new payment reference number (PRN) ending in 70 to quote when they would be required to pay on set payment days.
“You need to check that the withholding amounts you’re paying using your new PRN match the amounts you’ve reported via single touch payroll. You don’t need to report PAYG withholding on your activity statements if you report through single touch payroll,” the ATO said.
Additionally, businesses were advised that they could request to stay on their existing cycle if they estimated that their 2025–26 PAYG withholding amount was going to be less than the relevant threshold.
“To do this, send us a request to remain on a lower withholding cycle form within 21 days from the issue date of our letter. Provide the reason for your request, outlining your change in circumstances and the estimated amount of withholding in 2025-26.”
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