Employers will now be able to report their pay as you go (PAYG) withholding via Single Touch Payroll (STP), which will also be used to help prepare activity statements. This will allow employers to provide the necessary information only once, simplifying the reporting process.

Starting from July 2023, the PAYG withholding labels W1 and W2 will be prefilled in ATO online services using the information reported through STP. This prefill service will be available on the July 2023 activity statement for monthly PAYG withholders, and on the September 2023 activity statement for quarterly PAYG withholders.  Due to this change it is important you file your STP at the end of every pay cycle.

If the prefilled amounts match your records, you will not need to make any changes. However, if there are discrepancies, you will need to update the amounts accordingly. Note that while most PAYG withholding will be reported through STP, not all will be.