PAYG withholding controls: the CFO’s link between payroll and tax reporting

Published by SESAY · 2026-10-07 · General Australian payroll guidance

What to understand first

Withholding, reporting and paying are separate activities that need reconciliation. The ATO explains that failures to withhold or report can affect deductibility, with specific exceptions. Do not assume every payroll mistake automatically removes a deduction or that correcting the accounting entry resolves the tax obligation.

Practical checks

• Reconcile withholding by reporting period and legal entity.
• Track off-cycle payments, reversals and adjustments explicitly.
• Assign responsibility for investigating payroll-to-ledger differences.
• Escalate missed obligations to the authorised tax adviser promptly.

Fictional example

A fictional group posts an off-cycle payment after the regular payroll journal. The payment is correct, but its withholding is omitted from the finance workpaper. The next reconciliation identifies the difference before it becomes an unexplained year-end balance. The team improves the handover so every off-cycle run is visible.

Your next step

Ask Finance to explain the withholding liability from opening balance to closing balance, including payments and corrections. A zero balance can still conceal a misallocation between entities or periods. Preserve the reconciliation and supporting approvals in a controlled location.

How SESAY can help

SESAY can support payroll-to-Finance reconciliations and clearer responsibility maps. Tax advice and any regulated lodgment work should be handled by appropriately authorised professionals.

Official sources

• ATO — Removing deductions for non-compliant payments

Sources researched 2026-10-07. Examples are fictional and use stated assumptions. Confirm current rules and your circumstances before acting. This is general information, not individual tax or legal advice. SESAY is independent of the regulators linked here.