The ATO awards businesses small, medium or large withholder status according to the amount of PAYG that can be expected to withhold from their employees. Small withholder status applies to businesses withholding less than $25 000, with businesses withholding between $25 000 and $1 million having medium withholder status. Large withholder status applies to businesses withholding over $1 million, or with an annual turnover of more than $20 million.
Small withholders are required to report and pay their PAYG on a quarterly basis; however, a small withholder may also elect to pay their withheld amounts monthly. Medium withholders are now obliged to report to the ATO on a monthly basis. There are also currently no provisions allowing businesses to contest the requirement to report their PAYG monthly.
In order to remain compliant, large withholders are required to report weekly and to make electronic PAYG payments twice weekly. This may place a significant human resources drain on businesses that only just exceed $1 million in withheld PAYG. All businesses that will experience changes to their PAYG withholder status should receive written communication from the ATO detailing the changes.