From 1 July 2024, your new withholding reporting and payment cycle will be based on the amount you withheld and reported under your Australian Business Number (ABN) during the 2022-23 financial year. Understanding these changes will help you stay compliant and manage your finances smoothly.
How Your New Withholding Cycle is Determined
The ATO will base your new withholding reporting and payment cycle on the total amount you withheld and reported under your Australian Business Number (ABN) across all branches in the 2022-23 financial year. Affected businesses or their tax agents were notified of this change in April 2024. If you were one of those notified, your reporting and payment notifications are now changed.
Medium Withholders
Classification: If you withheld between $25,001 and $1 million, you will be classified as a medium withholder.
What You Need to Do:
- Report your PAYG withholding amounts on your activity statement monthly.
- Make payments by the monthly due date.
- Ensure your stated withholding matches the amounts reported through Single Touch Payroll (STP).
Large Withholders
Classification: If you withheld more than $1 million, you will be classified as a large withholder.
What You Need to Do:
- You will receive a new Payment Reference Number (PRN) to use when making payments on the designated payment dates.
- You won’t need to report PAYG withholding on your activity statement.
- Continue to reconcile your reported STP and paid amounts
Implementing Changes to Withholding Reporting and Payment Cycle
If your withholding cycle is changing, please ensure that your payroll software is updated before 1 July to align your withholding reporting and payments with the new due dates.
Request to Maintain Your Existing Cycle
If your PAYG withholding amount for the 2024-25 financial year falls below the relevant threshold, you can request to stay on your existing cycle.
Steps to Request:
- Complete the “Request to review ATO initiated PAYG withholding cycle change” form.
- Submit the form within 21 days of receiving the ATO’s letter.
- Provide the reason for your request, detailing any changes in circumstances and the estimated withholding amount for 2024-25.
Being proactive about these changes will help ensure your tax management remains smooth and compliant. If you have any questions or need assistance with these updates, please feel free to reach out. I’m here to help you navigate these changes and ensure your business operations continue without a hitch.