Changes to your pay as you go withholding cycle

The ATO review PAYG withholding cycles every year. They base their reviews on a business’s annual withholding amount.

The ATO will write to employers and tax agents in April to let you know if your PAYG withholding cycle is changing. If affected, your reporting and paying obligations will change from 1 July.

Your new withholding reporting and payment cycle will be based on the amount you withheld and reported under your Australian Business Number (ABN) in all branches in 2022-23.

Medium withholders

The ATO will classify you as a medium withholder if you withheld from $25,001 up to $1 million.

You’ll need to:

  • report your PAYG withholding amounts on your activity statement monthly

  • pay by the monthly due date

  • check that your stated withholding matches the amounts you reported using Single Touch Payroll (STP).

Large withholders

The ATO will classify you as a large withholder if you withheld more than $1 million. You’ll get a new Payment Reference Number (PRN) to quote when you pay on the set payment dates.

You’re not required to report PAYG withholding on your activity statement. You should still reconcile your reported STP and paid amounts.

Changing your withholding reporting and payment cycle

You’ll need to make the changes to your payroll software before 1 July, to align your withholding reporting payments with the new due dates.

You can ask to stay on your existing cycle if you estimate your 2024-25 PAYG withholding amount will be less than the relevant threshold.

To do this, send a completed Request to review ATO initiated PAYG withholding cycle change form to us within 21 days of receiving our letter. Provide the reason for your request. This should include your change in circumstances and the estimated amount you expect to withhold in 2024-25.

For more information, visit ATO annual review of PAYG withholding cycles and review your record keeping practices.

Contact us today if you need more information in this area.

Source: March 2024
Reproduced with the permission of the Australian Tax Office. This article was originally published on

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