How to vary pay as you go (PAYG) instalments
How to vary pay as you go (PAYG) instalments
A downloadable version of this guide is available (NAT 4159, PDF, 137 KB).
You can use this guide to vary your PAYG instalment amount or rate if you are one of three types of quarterly payers.
- If you pay four instalments each year on the basis of gross domestic product (GDP) adjusted notional tax. You pay an amount we have recommended - option 1 on your activity statement.
- If you pay two instalments each year on the basis of GDP adjusted notional tax. You pay an amount we have recommended - option 1 on your activity statement. You may be a primary producer or special professional.
- If you pay instalments on the basis of instalment income. This is an instalment rate we have recommended that you use to work out the amount to pay based on your instalment income - option 2 on your activity statement.
PAYG instalments is a system for you to pay your expected tax liability on your business and investment income in instalments for the current income year.
We use your last assessed income tax return to calculate and advise you of:
- a PAYG instalment amount that you pay, or
- an instalment rate that you can use to work out your instalment amount yourself.
Some quarterly payers pay four PAYG instalments a year. These quarterly payers (such as some primary producers and special professionals) are eligible to pay two instalments each year.
You will receive a quarterly activity statement or instalment notice that tells you your tax obligations, including your PAYG instalment amount or rate.
This guide will help you work out how to vary your instalment amount or rate on your activity statement or instalment notice.
You can choose to vary your PAYG instalment rate or instalment amount if you estimate your business and investment income and the tax on this income and you:
- think the amount or rate we calculated will mean you will pay more (or less) than your expected tax for the income year, or
- think the amount or rate you varied earlier will mean you will pay more (or less) than your expected tax for the income year.
You must then use the varied amount or rate for the remaining quarterly instalments in the income year, unless you vary again.
You may be liable to pay the GIC if any of the following conditions apply:
- you vary downwards and your varied instalment amount is based on an estimate that is less than 85% of the actual tax payable on your business and investment income
- your varied rate is less than 85% of the instalment rate that you should have applied
- you vary your instalment amount to zero but have business and investment income for the year and tax payable on this income.
Remission of general interest charge
Generally, if we charge you a GIC amount, you can ask us to reduce or waive it. You must ask us in writing and outline the circumstances that led you to delay payment. We will consider both:
- your extenuating and unforseen circumstances
- the steps you have taken to relieve the effects of those circumstances.
You can see the grounds for the remission of GIC in our Tax Office receivables policy.
Varying to nil amounts
If you pay instalments on the basis of GDP adjusted notional tax and you think the assessed tax you will pay on your investment or business income this year will be nil, on your activity statement:
- write '0' at T8 and T9
- record a reason code at label T4.
If you calculate your instalments based on your instalment income and have no investment or business income for the period, report a nil amount at label T1 on your activity statement. If you have nil amounts at all labels (including instalment income) on your activity statement, you can lodge it over the phone on 13 72 26.
When you should vary your PAYG instalment amount or instalment rate
The instalment amount or instalment rate we calculated is based on your business and investment income tax from your last assessed income tax return.
Usually, you would vary only if your situation has changed and you think the amount or rate we calculated will result in you paying significantly more (or less) than your expected tax payable on your business and investment income for the year.
You do not have to vary your PAYG instalment if the amount or rate we calculated results in you paying too much - you will receive a refund of any overpayment when we assess your income tax return.
If the instalment amount or instalment rate we calculated is insufficient to meet your income tax liability for the year, you simply pay the balance owing when we assess your income tax return.
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If you use the instalment amount or instalment rate we calculated, there is no risk that you will incur the GIC.
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Whether or not you vary your PAYG instalment, when we have processed your income tax return, we will credit your PAYG instalments against your assessment to calculate whether:
- you owe more tax
- we owe you a refund.
You may want to vary the instalment amount we calculated because of significant changes in your income or tax situation. For example, if you:
- reduce or expand a share portfolio
- receive significantly lower or higher dividends from a share portfolio
- use savings or investments for private purposes that reduce the amount of income you receive
- sell or buy an investment property
- receive more or less rent from a property
- cease to earn income from business activities
- have much higher or lower expected tax deductions for about the same level of business and investment income
- have less or more business and investment income but about the same level of expected tax deductions (for example, your running costs are about the same), or
- have repaid your Higher Education Loan Programme (HELP) or Financial Supplement debt.
An instalment rate is a percentage figure that approximates the proportion of your business and investment income that you must pay as tax, based on your last assessed income tax return.
To work out the amount of your PAYG instalment, multiply the instalment rate by your instalment income for a quarter.
There is no need to vary just because your income has gone up or down since your last tax assessment. The instalment rate is a percentage, so the amount you pay will go up or down with your income.
Usually, you would vary your instalment rate only if there is a significant change in the proportion of your business and investment income that will be paid as tax. For example, if you have either:
- much higher or lower expected tax deductions for a similar level of business and investment income
- less or more business and investment income for the same level of expected tax deductions (for example, your running costs are about the same).
How to vary your instalment amount (option 1)
If you are a quarterly payer who pays an instalment amount we calculated, either by paying two or four instalments each year, you will see an amount printed in box T7 in option 1 on your quarterly activity statement or instalment notice.
Usually, T7 is an amount we calculate based on your notional tax but adjusted for likely growth in your business and investment income (based on growth in Australia's GDP).
If you varied your instalment amount in a previous quarter of the income year, the amount in box T7 will be your varied instalment amount.
If you calculate your instalments using the instalment rate × instalment income method (option 2 on your activity statement), you will need to vary your instalment using option 2.
You may want to vary your instalment amount up or down if your situation has changed since your last tax assessment.
For example, you expect your business and investment income to be significantly less.
Even if you have received more business and investment income compared to last year, you do not need to vary if you pay the instalment amount that we calculated.
If your situation has not changed since your last tax assessment there is no need to vary.
If you vary your instalment amount, use the varied amount for each subsequent quarter in the income year, unless you choose to vary the amount again in a later quarter.
Use the worksheet to help you estimate your tax.
You may be liable to pay the general interest charge if your varied instalment amount is based on an estimate that is less than 85% of the actual tax you pay on your business and investment income for the full income year. We will work out the actual tax payable on your business and investment income when we assess your annual income tax return. You should pay any additional tax owing after lodgment of your income tax return.
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If you expect to have no business or investment income for the full year, you can vary to zero. In this case, you do not need to work through the tax estimate worksheet. Your varied instalment amount is zero. Go to step 4.
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You can also vary to zero if you expect your deductions against your business and investment income to be more than the income itself for the full year. For example, you may have a negatively geared investment property. If you are not sure, use the worksheet to estimate the tax on your business and investment income.
Activity statements with nil amounts at all labels (including instalment income) can be lodged over the phone on 13 72 26. You cannot lodge over the phone for the quarter you vary to nil, but you may for later quarters where there are no other obligations to report.
The amount you pay depends on the quarter you are paying for and how much you paid in previous quarters.
If you pay four quarterly instalments per year, use Table A to work out the proportion to pay.
If you pay two instalments per year, use Table B to work out the proportion to pay. If you are notified of an instalment rate for the first time during the second, third or fourth quarters of the income year, you may be required to pay a lesser amount. Use Table C to work out the proportion to pay.
Table A: Four instalments - proportion to pay in a quarter
Instalment quarter
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Your varied instalment amount is:
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First quarter in the income year that you are liable to pay an instalment
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- 25% of your estimated tax for the income year
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Second quarter for that income year
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- 50% of your estimated tax for the income year
- minus the amount of your 1st quarter instalment
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Third quarter for that income year
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- 75% of your estimated tax for the income year
- minus the amount of your 1st and 2nd quarter instalments
- plus any credit you claimed for the 2nd instalment quarter
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Fourth quarter for that income year
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- 100% of your estimated tax for the income year
- minus the amount of your 1st, 2nd and 3rd quarter instalments
- plus any credit you claimed for the 2nd and 3rd instalment quarters
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Example 1
Jane receives an income from her investments. We have calculated her quarterly PAYG instalment amount to be $1,000. Jane pays this amount in her first quarter (1 July to 30 September) and second quarter (1 October to 31 December).
In January, Jane sells a portion of her investments and decides to vary her PAYG instalment amount to take into account her new situation. Using the worksheet , Jane estimates her tax payable on business and investment income for the year will be $3,100. For her third quarter (1 January to 31 March), Jane works out her varied PAYG instalment as follows:
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Jane's estimated tax
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$3,100
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× 75% (3rd quarter proportion)
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$2,325
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minus 1st and 2nd quarter instalments
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$2,000
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amount to pay in 3rd quarter instalment
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$ 325
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Table B: Two instalments - proportion to pay in a quarter
Instalment quarter
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Your varied instalment amount is:
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The instalment due in April (third quarter instalment)
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- 75% of your estimated tax for the income year
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The instalment due in July for the income year
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- 100% of your estimated tax (fourth quarter instalment)
- minus the amount of your April instalment (third quarter instalment)
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Table C: Two instalments - proportion to pay where you are first given an instalment rate during the second, third or fourth instalment quarter
If you are first given an instalment rate in the:
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Your varied instalment amount for the third instalment quarter (January-March quarter) is:
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Your varied instalment amount for the fourth instalment quarter (April-June quarter) is:
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Second instalment quarter (October-December quarter)
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- 50% of your estimated tax for the income year
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- 75% of your estimated tax for the income year
- minus the amount of your third quarter instalment
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Third instalment quarter (January-March quarter)
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- 25% of your estimated tax for the income year
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- 50% of your estimated tax for the income year
- minus the amount of your third quarter instalment
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Fourth instalment quarter (April-June quarter)
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not applicable
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- 25% of your estimated tax for the income year
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Step 4: complete your activity statement or instalment notice
Write your estimated tax for the year (from step 2) in the box T8 on your activity statement.
Write your varied instalment amount for the quarter (from step 3) in box T9. If your varied instalment amount is a negative amount or zero, write '0' at T9.
Write your variation reason code in box T4 (see the list of reason codes). Do not leave T4 blank.
Transfer the varied amount from T9 to box 5A. (Ignore this step if you are using Form T as there is no 5A box.)
If the varied instalment amount you worked out at step 3 is zero or positive, go straight to step 5.
If the varied instalment amount you worked out at step 3 is negative, you are entitled to claim a credit from PAYG instalments you paid earlier in the income year. If you want to claim a credit against instalments paid in previous quarters, write the amount you worked out at step 3 in box 5B on your activity statement. However, write it as a positive amount (do not show the minus sign).
Even if you are entitled to a credit, you do not have to claim it in your activity statement. If you overpay your PAYG instalments we will credit them to you when we assess your annual income tax return.
Complete any other labels you are required to.
If you are satisfied that the information you have provided is not false or misleading, sign and date the form.
Step 5: lodge and pay
Pay any amounts owing and lodge your activity statement by the due date shown on the activity statement.
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You can lodge your business activity statement (BAS) online.
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You can also go online and use the business portal to revise, print and list previous activity statements, check accounts, update business registration details and send secure messages. You will also receive instant confirmation that you have lodged. Going online is the fast, convenient and secure way to do business with us. For more information visit www.ato.gov.au/onlineservices
If you pay an instalment that you work out by multiplying the instalment rate by your instalment income, you will find your instalment rate printed in box T2 in option 2 on your quarterly activity statement.
Usually, the rate at T2 is the instalment rate we calculated from information in your last assessed income tax return.
If you varied your instalment rate in a previous quarter of the income year, the rate in box T2 will be your latest varied instalment rate.
Multiply the instalment rate by your business and investment income for the quarter to work out the amount to pay.
Step 1: decide whether you want to vary
There is no need to vary just because your income has gone up or down since your last tax assessment. The instalment rate is a percentage, so the amount you pay will go up or down with your income level. For example, if your business and investment income for the quarter is zero, the amount you pay will also be zero, regardless of your instalment rate.
Usually you would vary your instalment rate only if there is a change in the proportion of your business and investment income that will be paid as tax. For example, you expect to have a much higher proportion of deductions this year for your business and investment income. If you are not sure, use the worksheet to estimate the tax on your business and investment income.
If you vary your instalment rate, continue to use the varied rate for each new quarter in the income year, unless you choose another rate for a later quarter. Your varied rate will not, however, carry over to the next income year.
Step 2: estimate your business and investment income (also known as instalment income) for the year
Instalment income is generally your gross business and investment income, excluding any capital gains.
Step 3: estimate the tax on your business and investment income for the year
Use the worksheet to help you estimate your tax.
To work out your varied instalment rate as a percentage (to two decimal places), divide your estimated tax (step 3) by your estimated income (step 2) and multiply by 100.
The formula looks like this:
estimated income tax for the year (step 3) x 100 = xx.xx
estimated instalment income for the year (step 2)
Example 2
Harmander is a sole trader. We have calculated his instalment rate at 16.84%. He uses this instalment rate in the first quarter (1 July to 30 September) and second quarter (1 October to 31 December) to work out his instalment amount.
Harmander decides to vary his instalment rate for the third quarter because increased competition has reduced the profit margin on his sales. He estimates that his income tax for business and investment income for the year will be $10,125 and his instalment income for the year will be $82,480. Harmander works out his varied instalment rate as follows:
$10,125 x 100 = 12.27%
$82,480
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You may be liable to pay the GIC if your varied instalment rate is less than 85% of the instalment rate that would have covered your actual liability for the income year. We will work out that instalment rate when we assess your income tax return based on both:
- your business and investment income
- the tax attributable to that income (excluding capital gains) for the year.
Step 5: work out any credit from previous instalments in the current income year
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If the instalment you are varying is your first instalment quarter for the current income year, there is no credit available. This is because you will not yet have paid any instalment amounts for the current income year. Go straight to step 6.
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You may be entitled to a credit if the varied instalment rate at step 4 is less than the rate you used to work out earlier instalments in the current income year. Even if you are entitled to a credit, you do not have to claim it in your activity statement. If you overpay your PAYG instalments we will credit you when we assess your income tax return. If you prefer not to claim a credit in your activity statement, go straight to step 6.
If you think you may be entitled to a credit and want to claim it in your activity statement, use steps 5.1 to 5.7 to work out the amount you may be entitled to claim.
Previous instalment credit worksheet
Step 5.1
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Add up your instalments for the earlier quarters in the income year (even if you have not paid all of them). These are the amounts you have recorded in box 5A on your previous activity statements for the income year.
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Previous instalments $
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Step 5.2
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Add up any credits you have claimed for the income year. These are the amounts you have recorded in box 5B on your previous activity statements for the income year.
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− minus Previous credits $
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Step 5.3
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Subtract the amount at step 5.2 from the amount at step 5.1.
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equals = Net previous instalments $
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Step 5.4
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Add up your instalment income for all earlier quarters in the income year. These are the amounts you have recorded in box T1 on your previous activity statements for the income year.
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Step 5.5
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Write down your varied instalment rate (this is the rate you worked out at step 4).
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Previous instalment income $ × times Varied instalment rate %
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Step 5.6
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Multiply the amount at step 5.4 by the varied instalment rate at step 5.5.
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equals = Previous instalments at varied rate $
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Step 5.7
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Subtract the amount at step 5.6 from the amount at step 5.3. If the result is a positive amount, this is the amount of the credit you can claim. Go to step 6.
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Net previous instalments - minus Previous instalments at varied rate equals = Credit (if any) +/− $
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Example 3
Tom is a sole trader and his notified rate is 16%. He has an instalment income for the first quarter (1 July to 30 September) of $30 000 and second quarter (1 October to 31 December) of $18 000. He pays $4800 in instalments for the first quarter and $2880 for the second quarter. His business is experiencing difficulties so he wants to reduce his instalment rate. He works out that his new rate should be 12% as he expects his instalment income to decrease over the next two quarters.
Using the previous instalment credit worksheet (Step 5) Tom completes his worksheet as follows:
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Step 5.1
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$7 680 ($4 800 + $2 880)
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Step 5.2
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$ NIL
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Step 5.3
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$7 680
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Step 5.4
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$48 000 ($30 000 + $18 000)
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Step 5.5
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12%
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Step 5.6
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$48 000 x 12% = $5 760
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The variation credit that Tom can claim is $1 920 on his activity statement at Label 5B.
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Step 6: complete your activity statement
- Write your quarterly instalment income at T1.
- Write your varied instalment rate (from step 4) in box T3.
- Work out the instalment amount by multiplying T1 by T3. Write the answer in boxes T11 and 5A.
- Write your variation reason code in box T4 (see the list of reason codes). Do not leave T4 blank.
- If you wish to claim a credit for one or more previous instalments (step 5), write the credit amount in box 5B.
- Complete any other questions you are required to complete.
- If you are satisfied that the information you have provided is not false and misleading, sign and date the activity statement.
- Pay any amounts you owe and lodge your activity statement by the due date shown on the activity statement.
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You can lodge your business activity statement (BAS) online.
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You can also go online and use the business portal to revise, print and list previous activity statements, check accounts, update business registration details and send secure messages. You will also receive instant confirmation that you have lodged. Going online is the fast, convenient and secure way to do business with us. For more information visit www.ato.gov.au/onlineservices
When you vary a PAYG instalment on an activity statement or instalment notice, you must write a reason code in box T4.
Choose the reason that best describes why you decided to vary your instalment amount or rate from the following list.
Table D: Variation reason codes
Code
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Reason
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Description
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21
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Change in investments
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Your investment strategy or policy has changed and this will significantly affect your annual tax liability. For example, you sold shares.
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22
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Current business structure not continuing
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Your current business has stopped trading or has changed its structure. For example, you have permanently closed your business.
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23
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Significant change in trading conditions
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Abnormal transactions relating to your business income or expenses will significantly affect your annual tax liability. For example, you have bought a major piece of machinery.
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24
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Internal business restructure
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You have restructured your business. For example, you have expanded or contracted it and this will significantly affect your annual tax liability.
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25
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Change in legislation or product mix
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A change in legislation or the product mix of your business will significantly change your annual tax liability.
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26
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Financial market changes
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Your business has been affected by domestic or foreign financial market changes. This reason code is for businesses involved in financial market trading, including those whose income is affected by changes in financial products, for example, banks, finance and insurance businesses.
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27
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Use of income tax losses
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You will be using income tax losses, including capital losses transferred from another entity, that will significantly affect your annual tax liability.
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Estimating your instalment income
Generally, instalment income is your gross business and investment income. Examples of instalment income include:
- gross sales
- gross fees for services
- interest received or credited to a bank account
- gross rent
- dividends received or re invested on your behalf
- royalties.
Your instalment income for the year includes:
- all the ordinary income you earn from your business or investment activities
- your proportion of any partnership income
- your proportion of any trust income
- assessable foreign pensions
- income that an amount has been withheld from because you did not provide your tax file number (TFN) or Australian business number (ABN)
- any amount you withdrew from a farm management deposit
- fuel tax credits.
Instalment income does not include:
- GST, wine equalisation tax or luxury car tax you charge your customers, clients or tenants
- any income such as salary and wages, where amounts have been withheld or should have been withheld under the PAYG withholding system (except income where amounts have been withheld because you did not provide your TFN or ABN)
- any imputation credit recorded on a dividend statement
- any amount that is only deemed to be a dividend under a specific provision of the income tax laws
- capital gains
- exempt income
- interest or other earnings credited to a First Home Saver Account (FHSA) held by you or a payment to you from a FHSA
- payments made and non-cash benefits provided in relation to the national rental Affordability Scheme
- grants under the energy grants credits scheme including the fuel sales grant, the product stewardship (oil) benefit and the cleaner fuels grant scheme
- government contributions paid under the First Home Saver Account Act 2008.
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If you are a beneficiary of a trust or in a partnership, there are special rules for working out the amount to include in your instalment income for each quarter. For more information about these rules see:
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Estimating the tax on your business and investment income
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This worksheet will help you estimate the tax on your business and investment income. See the explanations of each section on the following pages.
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If your business and investment income for the year will be zero, you can vary your instalment amount or instalment rate to zero. You do not need to estimate your tax or income to do this.
Tax estimate worksheet
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Income year:
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Amount
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estimated income
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$
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- minus
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estimated allowable deductions
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$
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= equals
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estimated taxable income
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$
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tax on estimated taxable income
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$
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- minus
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Estimated tax offsets (other than refundable tax offsets)
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(eg spouse, zone, pensioner, superannuation contributions)
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$
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- minus
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Estimated foreign income tax offsets
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$
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= equals
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estimated net tax payable
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$
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+ plus
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estimated Medicare levy
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$
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= equals
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estimated net tax payable after applying Medicare levy
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$
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+ plus
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estimated compulsory Higher Education Loan Programme (HELP) repayment
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$
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estimated compulsory Financial Supplement repayment
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$
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- minus
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estimated refundable tax offsets
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(eg franking credit offset or education expenses tax offset)
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$
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estimated tax credits
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$
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= equals
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estimated tax on business and investment income
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$
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When you are estimating your income, include all your estimated gross income, such as:
- salary, wages or allowances
- payments made under a labour hire arrangement
- payments subject to voluntary withholding agreements
- personal services income attributed to you
- income from a business (not subject to voluntary agreements)
- Australian government allowances
- Australian government pensions
- assessable foreign income including pensions and annuities
- interest
- dividends
- imputation credits
- partnership distributions
- trust distributions
- other assessable income.
Do not include:
- net capital gains (these are not included as they are generally one off payments that you will not receive in the next income year), or
- exempt income such as the family tax benefit or child care benefit payments.
When you are estimating your allowable deductions, include your estimate of your allowable deductions, such as:
- work related expenses
- business expenses
- interest and dividend deductions
- gifts or donations
- the deductible amount of an undeducted purchase price of an Australian pension or annuity
- the cost of managing tax affairs
- tax losses of earlier income years
- other allowable deductions.
Apply the current tax rate to your estimated taxable income.
If you are a resident of Australia, these tax rates apply for the current income year. Or visit our website and search for Rates, calculators & tools to access up to date tax rate information.
Tax offsets (other than refundable tax offsets)
When you are estimating your tax offsets, do not include refundable tax offsets. Tax offsets may include:
- spouse (without dependent child or student), child housekeeper or housekeeper
- super contributions, annuity and pension (except contributions made on behalf of your spouse)
- zone or overseas forces
- senior Australians tax offset
- pensioner tax offset
- beneficiary tax offset
- net medical expenses tax offset
- eligible termination payment tax offset
- life assurance bonus tax offset
- foreign income tax offset
- parent, spouse's parent or invalid relative, and
- other tax offsets.
Tax offsets are not deductions. You take deductions from your income to work out your taxable income. The tax on your taxable income is then reduced by your tax offsets.
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The income test for the senior Australian tax offset has changed. This means you may no longer be eligible.
For more information, refer to Changes to income tests (NAT 72974).
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Some tax offsets are refundable. Do not include refundable tax offsets here as there is a section for them later in the worksheet. See Refundable tax offsets for more information.
If your tax offsets are greater than the tax on your assessed taxable income, you can only use them to reduce the amount of tax on your taxable income to zero.
Tax offsets do not reduce your Medicare levy, which we work out on your estimated taxable income.
Do not include the following in the tax estimate worksheet:
- the private health insurance rebate
- mature age workers tax offset
- franking deficit tax offset
- entrepreneur's tax offset
- the super tax offset for contributions made on behalf of your spouse
- the low income tax offset
- education expenses tax offset.
These tax offsets will not reduce your estimated tax on business and investment income. They are only taken into account when we assess your tax return. You should not vary the amount of your PAYG instalment for these tax offsets.
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Tax offset amounts may change from year to year. Phone us for the latest information on tax offset amounts. See more information on tax offsets.
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If you receive foreign income that is taxable in Australia and you have paid foreign income tax on that income, you may be entitled to a foreign income offset (formerly known as a foreign tax credit).
A foreign income tax offset may be allowed for foreign income tax that is either:
- levied on the taxpayer's income, profits or gains that are of an income or capital gains nature
- imposed in place of a tax on the net amount of income (similar to Australian withholding tax).
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You will not be able to work out your foreign income tax offset if you estimate either:
- a capital gain
- exempt foreign employment income.
If you expect to receive either of these, phone us for more information - see More information.
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Your estimated net tax payable will be your tax on estimated taxable income minus your estimated tax offsets.
If this is a negative amount, your estimated net tax payable will be nil. Write '0' in this box. This is because your tax offsets (other than refundable tax offsets) cannot reduce your Medicare levy or compulsory HELP or Financial Supplement repayments.
Your estimated Medicare levy can be worked out by multiplying your estimated taxable income by 1.5%.
Do not include extra amounts payable under the Medicare levy surcharge.
You may be exempt from paying the Medicare levy or be eligible to pay a reduced amount of Medicare levy. Phone us if you think you may be exempt or eligible to pay a reduced amount.
This is your estimated net tax payable plus your Medicare levy.
If this is a negative amount, your estimated net tax payable after applying your Medicare levy will be nil.
Write '0' in this box.
This item applies to you if you have to repay amounts under the Higher Education Loan Program (HELP).
Your estimated tax may include an amount for you to pay toward your HELP liability if your repayment income is above the minimum repayment threshold, even if you are still studying.
From 1 July 2009, repayment income will be calculated using the following amounts:
- your estimated taxable income
- your total reportable fringe benefits amounts (as reported on the payment summary)
- total net investment loss (which includes net rental losses)
- reportable super contributions
- any exempt foreign employment income amounts included in an income tax return.
We will only calculate one compulsory repayment in this assessment based on your accumulated debt at the time we make the assessment.
You will not have to make a compulsory repayment if you have a spouse or dependants and if, due to low family income, you either:
- are entitled to a reduction of your Medicare levy
- do not have to pay the Medicare levy.
This item only applies to you if you are liable to repay amounts under the Student Financial Supplement Scheme (SFSS).
Your estimated tax may include an amount for you to pay toward your Financial Supplement debt if your estimated repayment income is above the minimum repayment threshold, even if you are still studying.
From 1 July 2009, repayment income will be calculated using the following amounts:
- your estimated taxable income
- your total reportable fringe benefits amounts as reported on the payment summary
- total net investment loss (which includes net rental losses)
- reportable super contributions
- any exempt foreign employment income amounts included in an income tax return.
We will only calculate one compulsory repayment in this assessment based on your accumulated debt at the time we make the assessment.
You will not have to make a compulsory repayment if you have a spouse or dependants and if, due to low family income, you either:
- are entitled to a reduction of your Medicare levy
- do not have to pay the Medicare levy.
Refundable tax offset
Where you have refundable tax offsets available, you can apply these to reduce your tax, including your Medicare levy.
Refundable tax offsets include the franking credit tax offset (the equivalent of the imputation credits that you estimate you will receive for the financial year).
These tax offsets can be applied against your Medicare levy, HELP or Financial Supplement debt liabilities and any excess will be refunded to you after we have assessed your return.
Do not include the private health insurance rebate tax offset. You cannot reduce your estimated tax on business and investment income with this tax offset. We only take it into account when we assess your tax return. You should not vary the amount of your PAYG instalment for this offset.
These items include amounts that you estimate will be withheld from payments made to you such as:
- salary or wages
- payments subject to voluntary agreements
- payments made under a labour hire arrangement
- personal services income attributed to you
- investments where you have not supplied a TFN
- sales or services you have provided where you have not quoted an ABN.
If this amount is a negative figure, your estimated tax is nil.
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You should consider the revised definition of income when considering whether you should vary your PAYG instalments.
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More information
For more information about PAYG instalment tax or if you need help varying quarterly PAYG instalments:
For more information about the business portal and lodging your activity statement online, go to www.ato.gov.au/onlineservices
Family Assistance Office (FAO)
For more information about claiming a family tax benefit (FTB) entitlement:
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You can get the following publications from our website or by phoning 1300 720 092 between 8.00am and 6.00pm, Monday to Friday:
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Updating your address
You can choose to have separate postal addresses for different tax areas. For example, your postal address for income tax purposes may be different from activity statements, including PAYG instalment notices.
Lodging your income tax return will automatically update your income tax address only.
To update your address for receiving activity statements and PAYG instalment notices, phone the business helpline on 13 28 66.
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Other services
If you do not speak English well and want to talk to a tax officer, phone the Translating and Interpreting Service on 13 14 50 for help with your call.
If you are deaf, or have a hearing or speech impairment, you can contact us through the national Relay Service (NRS). If you are:
- a TTY user, phone 13 36 77 and quote the Tax Office number you need
- a Speak and Listen (speech-to-speech relay) user, phone 1300 555 727 and quote the Tax Office number you need
- an internet relay user, connect to the NRS on www.relayservice.com.au and quote the Tax Office number you need.
If you would like further information about the NRS, phone 1800 555 660 or email helpdesk@relayservice.com.au
Last Modified: Tuesday, 15 December 2009
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