A brief on Pay As You Go (PAYG)Installments

This Presentation is aimed at explaining basic compliance requirement for PAYG rule.

It explains when you are liable to PAYG and its calculation.

You have reported $2,000 or more of gross business and investment income on your previous tax return ( It also excludes the income on which tax has been witheld as well as capital gains earned)

Tax payable on your last assessed tax return is more than $500 (disregarding any voluntary payments or PAYG installment credits that were applied)

Tax payable is more than $250 in current year

You are not entitled to the Seniors and pensioners tax offset.

In case of Non residents it is payable whenever income accrues to an Assesses.

The most recent notional tax was less than 8000$

Business is registered for GST and it is payable annually

if you are a partner in a partnership registered for the GST and the partnership reports and pays GST annually.

ATO will send Quarterly activity statement which needs to paid quarterly

The payment schedule would be as under:

Quarter Instalment due by

July - September 28 October

October - December 28 February

January - March 28 April

April - June 28 July

An individual can opt to pay installments as per the calculation done by individual himself however You may have to pay interest if your installment amount or rate is based on an estimate that is less than 85% of the actual tax payable on your investment and business income.

However if the PAYG installments are as per the calculation of ATO there would be no need of penalty.