• When you can vary PAYG instalments

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

    You don't 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.

    If you do elect to vary your PAYG instalment rate or instalment amount, you must notify us in the approved form (your BAS or instalment notice) on or before the day when the instalment is due. You must then use the varied amount or rate for the remaining instalments in the income year, unless you vary again.

    You may be liable to pay the general interest charge (GIC) if you vary your PAYG instalment rate or instalment amount downwards and the following conditions apply:

    • your varied instalment amount is based on an estimate that is less than 85% of the actual tax payable on your business and/or investment income for the income year
    • your varied instalment rate is less than 85% of the instalment rate that you should have applied for the income year.

    Next step:

    • Use our PAYG instalments calculator to work out if you need to vary or not
    PAYG instalments calculator - individualsPAYG instalments calculator- companies

    See also:

      Last modified: 18 Apr 2017QC 16159