Changes to your PAYG withholding cycle

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

ATO reviews employer PAYG withholding payments each financial year to check if withholding cycles need changing based on your business’s annual withholding amount.

During April, ATO will be writing to let you know if your cycle needs to change. If it does, your reporting and payment obligations will change from 1 July 2026.

Your new withholding reporting and payment cycle will be changed if your annual withholding payments in all branches have increased.

Where your annual withholding amount is:

• between $25,000 and $1 million (medium withholder status), you’ll need to report on your activity statement and pay monthly
• more than $1 million (large withholder status) you’ll need to pay electronically within six to eight days from the day you withheld the amount, such as when staff are paid.

If you’re a large withholder, you’ll get a unique Payment Reference Number (PRN) to quote when you pay. 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.

What you need to do if your status changes

It’s important that you make the changes to your payroll software before 1 July 2026 to align your withholding reporting and payments with the new due dates.

You can ask to stay on your existing cycle if your estimated 2026–27 PAYG withholding amount will be below the relevant threshold. To do this:

• submit a request to remain on a lower withholding cycle form (PDF, 1.28MB)This link will download a file within 21 days from the issue date of our letter
• include the reason for your request, outlining your change in circumstances and your estimated withholding amount in 2026–27.

For more information, visit ATO annual review of PAYG withholding cycles.

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Source: ATO