The Dynamic PAYGI consultation meeting was held on 7 August 2026 11:00 am AEST.
Key outcomes
Summary
Below is a summary of key outcomes. The full key messages and artefacts are available on the DSP Hub .
Introduction and purpose
This session introduced the future direction for Dynamic PAYGI while helping to identify the opportunities, challenges and support needs for the 2026-27 pilot and prepare for a deeper discussion on implementing Dynamic PAYGI in 2027.
Dynamic PAYGI overview
An overview was provided of the Dynamic PAYGI measure, including the Government's commitment to introduce an opt-in model from 1 July 2027. The aim is to better align instalment payments with current business performance, reducing both underpayments and overpayments while improving cash flow certainty for businesses.
Key points
- Dynamic PAYGI will be optional, not mandatory.
- The focus remains on small and medium businesses.
- Existing BAS reporting processes will be leveraged where possible.
- The pilot will be expanded to support design and implementation activities.
Current PAYGI experience in software
Current software products support PAYGI reporting and lodgment, including the ability for users to vary instalment amounts where required. Most software products, however, do not perform PAYGI income or PAYGI variation calculations within the product itself. Instead, variation calculations are typically undertaken outside the software environment using spreadsheets or calculations completed by accountants, tax agents or advisers.
Supporting pilot participants through software
Explore how DSPs could help participants understand and engage with Dynamic PAYGI during the pilot.
DSPs highlighted several considerations for supporting pilot participants:
- The Commissioner's default instalment amount is used by most businesses.
- For software providers to prioritise development resources, a clearly defined customer benefit is required.
- Customer demand, ease of implementation and a compelling value proposition would be critical factors influencing adoption by both software providers and end users.
Desired Dynamic PAYGI experience
An overview of the expanded pilot program was provided, including proposed eligibility criteria and a manual calculation methodology.
Key points
- Calculation complexities are associated with tax adjustments, depreciation and carried forward losses.
- Most DSPs indicated they could support pilot participants using current software processes but delivery of new software functionality within pilot timeframes would be challenging.
A proposed future model was outlined, involving:
- an ATO-hosted calculation service
- APIs that could support Dynamic PAYGI calculations in software
- new variation codes identifying use of the Dynamic PAYGI method.
Member comments:
- Preference was for an ATO-hosted calculation service.
- Real-time responses would be necessary.
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The solution should minimise data requirements and implementation complexity.
Target users and adoption opportunities
A phased implementation approach was supported, noting that commencing with the simplest cohort would provide an opportunity to validate the model, understand adoption behaviours and refine the solution before considering more complex entity types.
Participants agreed the current focus on companies as the initial target segment for Dynamic PAYGI as they have fewer variables when compared to individuals and trusts.
DSPs highlighted a number of considerations for future expansion, including:
- Individual taxpayers in business would require substantial pre-fill information and would introduce additional complexity associated with marginal tax rates, external income sources and annualised income calculations.
- Expanding Dynamic PAYGI beyond companies should only be considered after the company model has been proven and implementation lessons have been assessed.
Member comments
Participants identified several factors that will influence success:
- strong support and advocacy from tax professionals
- clear customer value and cash flow benefits
- minimal implementation effort for software providers
- fast and reliable APIs
- transparency of calculations for agents and businesses.
Wrap-up and next steps
- Session 2 is scheduled for Monday, 17 August 2026 to continue discussions on the Dynamic PAYGI initiative.
- Feedback and insights gathered from this session will be used to refine the content and focus areas for the next consultation session, with particular emphasis on implementation considerations and technical design.
Next meeting
Monday 17 August 2026
If you have any questions, raise a ticket via the DSP service desk in Online services for DSPs.
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