More often than not, if you pay on a weekly or fortnightly basis, you will have 52 and 26 pay cycles in a financial year, respectively.
However, on occasion, you may have a financial year that has 53 weekly or 27 fortnightly pay cycles instead. When this scenario happens there may be a shortfall in the PAYG withheld from your employees’ wages over the year.
If there is to be an additional pay cycle within the financial year, employees should be made aware early on in the financial year of the potential shortfall. Your employees may wish to do an upward variation.
What is an upward variation?
An upward variation is when an employee requests to increase the PAYG deducted from their pay each week or fortnight to avoid a bill from the ATO at the end of the financial year.
See below links for Guidelines, variation forms and tax withheld calculators for increasing PAYG.
For more information and to work out how to calculate the extra withholding amount if there is an additional pay cycle within the financial year, visit the ATO website.