Got an ATO estimate notice for unpaid PAYG withholding or super? Use the 7-day window

An estimate notice is the ATO saying: you haven’t told us what you owe, so we’ve worked it out ourselves. It usually covers PAYG withholding, super guarantee charge or net GST that should have been reported but wasn’t. The two things that matter most are easy to miss. The amount is payable as soon as the notice is given, and the simple way to correct it closes after 7 days.

This guide works through the notice in order. First the clock, then the figure, then the money.

What is an ATO estimate, in plain terms?

Under Division 268 of Schedule 1 to the Taxation Administration Act 1953, the Commissioner can estimate unpaid amounts of PAYG withholding, super guarantee charge (SGC) and net amounts of GST, including wine equalisation tax and luxury car tax. The ATO’s practice statement on enforcement says it can then recover the amount of the estimate.

The estimate is built from the information the ATO already holds, such as your earlier lodgements and payroll reporting. It isn’t an audit, and it can be too high or too low.

Two features make it different from an ordinary tax bill:

• It’s due straight away. The law says the amount is due and payable when the ATO gives you the notice. There’s no 21- or 28-day payment period built in.
• It isn’t a last resort. The ATO’s guidance says it uses estimates routinely when they will help it collect faster or more efficiently. A business that simply stops lodging can expect one.

Why the 7 days matter more than the dollar figure

Section 268-40 lets you have the estimate reduced or revoked by giving the ATO a statutory declaration within 7 days after it gives you the notice, or within any longer period the ATO allows. In practice, this is the cleanest way to swap the ATO’s guess for the real number.

Miss it and the estimate stands as a separate debt that the ATO can collect. Your remaining options get narrower:

Route	Timing	What it needs
Statutory declaration	Within 7 days after the notice is given (or longer if the ATO allows)	A declaration of the true position: the actual unpaid amount, or that it’s been paid or never existed
Affidavit in court proceedings	Within 14 days after you first take a procedural step in recovery proceedings (or longer if the court allows)	Facts sufficient to prove the correct amount
ATO’s own review	Any time, at the ATO’s discretion	Credible information, such as accurate late lodgements or a late statutory declaration

The third route exists, but you can’t count on it. Treat day 7 as the real deadline.

A word on counting: the clock runs from when the ATO gives the notice, which can be before you open the envelope. If your mail goes to an old accountant or a forgotten registered office, days can disappear. Our guide on making sure notices actually reach you covers that. Put the date into the debt letter triage tool the moment you see the notice.

What should I check in the first 24 hours?

Work through this in order. It’s the same sequence an experienced adviser would follow.

1. Find the date the notice was given. Note it, then count 7 days. Don’t wait for anyone before doing this.
2. Identify the tax type and periods. PAYG withholding, SGC or GST, and which months or quarters.
3. Pull your real figures. Payroll reports, STP finalisation, super clearing house records and your bookkeeping file. You’re comparing the ATO’s number with yours.
4. Call your tax agent or accountant today. They can prepare the statutory declaration and the missing lodgements together.
5. Check for other letters. A DPN, garnishee or ATO warning letter may already be in the pile and may have its own clock.
6. Start the money conversation now. Even a corrected estimate is still a debt. Finding out early what funding is possible costs nothing.

If you’d like that last step done in parallel while your accountant fixes the figures, tell us about the notice. It takes about a minute and there’s no credit check at the enquiry stage.

What goes in the statutory declaration?

Your accountant or lawyer should draft it, but you should know what it’s for. The declaration sets out the true position for each estimated liability. That could be the actual amount withheld and not paid, that the amount has since been paid in full, or that the liability never existed.

Accuracy matters more than anything here. The ATO’s practice statement says it looks at the substance of what’s declared, and won’t reduce or revoke an estimate if the declaration is false or misleading. A statutory declaration is also a formal legal document. It’s not the place for optimistic rounding.

Some owners hope the estimate will turn out to be higher than the true amount. Often it is, especially when it’s based on a busier earlier period. But sometimes the ATO’s figure is lower than what’s really owed. The declaration still has to tell the truth. Lodging accurate statements protects you for the next step, which is usually the director penalty regime.

How does an estimate link to director penalties?

This is where an estimate stops being a company problem and becomes a personal one for directors.

The ATO’s director penalties page says that if a company doesn’t report PAYG withholding, GST or SGC by the due date, the ATO may estimate the amounts, and director penalties can apply to those estimated liabilities. The reporting dates also decide what kind of director penalty notice a director could face:

• Reported within 3 months of the due date (PAYG withholding and GST), or SGC reported by its due date: a non-lockdown DPN can generally be remitted within 21 days by paying, appointing an administrator or small business restructuring practitioner, or winding up.
• Not reported in time: the penalty is “locked down”. Appointing an administrator or liquidator won’t remit it. Only payment will.

So an estimate notice often shows the company is already near, or past, the lockdown point. Lodging the missing statements quickly doesn’t undo lateness that has already happened. But it stops the problem growing into later periods, and it gives everyone real figures to work from.

What about super under payday super?

From 1 July 2026, employers must pay super so that it reaches the employee’s fund within 7 business days of payday. Under the new rules, the ATO assesses the SGC itself when super is late, instead of relying on an SGC statement from the employer. Our page on catching up on staff super explains how that works.

In practice, payroll data now reaches the ATO quickly. A super shortfall that once took a while to surface can show up fast. If an estimate or assessment arrives for super, treat the 7-day window exactly as above. Then fix the payroll rhythm so the next pay cycle doesn’t add to it.

An illustrative example

Illustrative only, a composite and not a real client. A Brisbane electrical contractor with eleven staff falls behind on BAS during a slow winter. The director keeps paying wages but stops lodging, intending to “catch up in spring”. In mid-September an estimate notice arrives for two quarters of PAYG withholding. The ATO has based it on the previous year’s busier quarters, so it’s well above what was actually withheld.

The director finds the letter four days after it was given. Their accountant drafts a statutory declaration from the STP data and lodges it, along with both outstanding BAS, on day 6. The estimate is reduced to the true withheld amount.

That still leaves a real debt, plus a director who now understands the lockdown risk for the late quarters. Rather than wait for a DPN, they look at funding. The business has no property, but steady turnover and clean bank statements support an unsecured facility to pay the corrected PAYG balance. Their home has equity, which gives them a property-secured fallback if the unsecured amount falls short.

The order is what matters here. Clock first, figure second, money third.

Correcting the estimate is half the job. What about paying it?

Once the statutory declaration is in and the figures are real, you’re back to an ordinary, if urgent, ATO debt. The usual routes apply:

• An ATO payment plan. Debts of $200,000 or less can often be set up online. Our guide to calling the ATO when you can’t pay covers how to make that conversation count. A plan doesn’t remove a director’s personal exposure on amounts already locked down.
• Property-secured funding. First or second mortgages and caveat loans from $20,000 to $5,000,000 against residential or commercial property. For tight deadlines, see using a caveat loan to meet a notice deadline.
• Unsecured cash-flow funding. Typically $5,000 to $500,000, sized on turnover and bank statements. That suits trading businesses without property. More on unsecured rescue funding.

To be clear about what funding can’t do: it can’t move an ATO deadline, and nobody can promise it will settle before one. Whether it fits depends on the security, how complete your documents are, and how many days are left. That’s why the money conversation belongs in week one, not after the next letter.

Frequently missed details

• The estimate and the real debt are the same debt. Paying the underlying liability counts against the estimate, and vice versa. The ATO isn’t collecting twice.
• A late declaration isn’t worthless. Even after day 7, accurate information can lead the ATO to reduce or revoke an estimate of its own accord. Just don’t rely on it.
• New directors have their own timing. The ATO allows newly appointed directors a period after appointment before they become liable for existing company debts. Get advice quickly if you’ve just joined a board.
• Keep lodging, even when you can’t pay. It’s the single habit that keeps estimates and lockdown DPNs away.

Fixing the figure is step one. Let’s line up the funding.

An estimate notice is the ATO filling in a blank you left. Once your accountant fills it in properly, you’ll know the real number. And you’ll often know whether a director penalty notice is likely. That’s the moment to have funding options ready, not the week a DPN lands.

We work with business owners on ATO debt all the time, including PAYG and super shortfalls that have grown into something bigger. Enquiring takes about 60 seconds and there’s no credit check when you first enquire. Your details aren’t sent to a pile of lenders, so your phone won’t light up with strangers. A real person reads your enquiry, looks at your situation and calls you back.

Please fill the form in accurately. Include the tax type, the corrected balance if you have it, the date on the notice and any property you could offer as security. Then we can tell you honestly whether funding can help, and how fast it’s realistic.

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