Significant adjustments to Pay As You Go (PAYG) withholding cycles have been announced by the Australian Taxation Office (ATO) and they will take effect on 1 July 2025. The total PAYG withholding amounts reported under an entity’s ABN across all branches for the 2023–24 financial year serve as the basis for these adjustments.
Key changes to PAYG withholding obligations under the new rules:
- Businesses that withheld between $25,000 and $1 million will be required to move to a monthly cycle of withholding upon reclassification as medium withholders.
- More frequent payment deadlines will apply to entities that withheld more than $1 million after they are reclassified as large withholders.
What Medium Withholders need to do:
Entities transitioning to a monthly cycle must:
- Report and pay PAYG withholding amounts monthly via their Activity Statement, using their existing Payment Reference Number (PRN) ending in 60.
- Continue to submit Single Touch Payroll (STP) reports on or before each payday.
- Ensure PAYG amounts reported on Activity Statements reconcile with figures submitted through STP.
Requirements for Large Withholders:
Large withholders will have additional reporting and payment responsibilities:
- PAYG withholding amounts will no longer be reported on Activity Statements.
- Businesses will receive a new PRN ending in 70, which must be quoted for each PAYG withholding payment.
- Payroll software must be updated to ensure electronic payments are made on time, in line with a new payment schedule based on the day of withholding.
Large Withholder Payment Schedule:
| Withholding day | Payment due date |
| Monday or Tuesday | Following Monday |
| Wednesday | Second Thursday after |
| Saturday or Sunday | Second Monday after |
Note: If a due date falls on a public holiday, payment is due the next business day.
It is important to check and ensure your lodgement cycle has not changed.
If you are unsure or have any concerns or questions regarding these changes, please contact our office.
