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  • When you can vary PAYG instalments

    You can vary your instalments if you believe using the current amount or rate will result in you paying too much or too little tax for the year. To do this, you need to be able to estimate the tax on your business and/or investment (instalment) income.

    You don't have to vary. If the amount or rate we calculate results in you paying too much, you will receive a refund of any overpayment after your tax return is assessed. If it’s not enough to meet your income tax liability for the year, you simply pay the balance owing after you receive your assessment.

    If you do vary your PAYG instalment amount or rate, here are some important things you need to know:

    • you need to lodge your variation on your business activity statement (BAS) or instalment notice
    • there's no limit to the number of variations you can make, but they need to be lodged
      • on or before the day your instalment is due
      • before you lodge your tax return for the year
    • your varied amount or rate will apply for all your remaining instalments for the income year, or until you make another variation.

    Interest and penalties

    When you vary your instalments it's important not to underestimate your amount, rate or instalment income. We compare your instalments to your total tax payable on your instalment income for the year, and if your varied instalments are less than 85% of that total, you may be subject to general interest charge on the difference, as well as penalties.

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      Last modified: 14 Mar 2018QC 16159