• Paying your instalments

    You pay four quarterly instalments a year unless both of the following conditions apply:

    • you are a primary producer or a special professional, such as an author, inventor, performing artist, production associate or sportsperson
    • your net income as a primary producer or special professional in your last assessment was at least $1 (that is, your income exceeded your deductions and the business did not run at a loss).

    If you are a primary producer or special professional and you meet this criteria, you are only required to pay GST instalments in the last two quarters in an income year. That is, the GST instalments for the first and second quarters are due for payment together with the amount payable for the third quarter. When working out your net income:

    • ignore any carried-forward losses
    • include net farm management deposits and withdrawals if withdrawals were more than deposits.

    Example 1: Primary producer

    Russell owns and operates a dairy farm.

    On 28 October 2012 he chooses to pay GST by instalments. While Russell has not yet lodged his income tax return for the 2011–12 income year, in his 2010–11 income tax return he had:

    • $200,000 income from dairy sales
    • farm expenses of $150,000
    • a carried-forward tax loss of $60,000.

    While Russell has a net loss of $10,000 ($200,000 income from dairy sales less $150,000 farm expenses, less $60,000 tax loss carried forward) for his most recently lodged income tax return, he still pays GST for the year in two instalments. This is because:

    • he carries on a primary production business
    • his assessable income from that business ($200,000) was more than his deductions related to that income ($150,000) in his most recent income tax return.

    Russell does not take his carried-forward losses into account when working out whether he pays two or four instalments.

    Example 2: Special professional

    Jana writes romance novels and short stories.

    On 28 October 2012 she chooses to pay GST by instalments. Jana lodged her 2010–11 income tax return in August 2011. In that year she earned $33,000 for her novels and $6,000 for a series of stories in a magazine. Her allowable deductions for expenses she incurred in producing this income were $5,000, leaving her with net assessable income from her writing activities of $34,000.

    Jana pays GST for the year in two instalments because:

    • she is a special professional
    • her assessable professional income ($39,000) was more than her deductions related to that income in her most recent income tax return.
    End of example

    See also:

    • TR 97/11 Income tax: Am I carrying on a business of primary production?

    Your instalment amount

    If you pay four instalments, we work out each instalment amount so that you pay 25% of your annual GST liability – and any wine equalisation tax or luxury car tax liability you may have – by each of the quarterly due dates.

    If you pay two instalments, we work out the instalment amounts so that you pay:

    • 75% of your annual GST liability – and any wine equalisation tax or luxury car tax liability you may have – by 28 April
    • the remaining 25% by 28 July.

    Whether you pay two or four instalments, we tell you your instalment amount before your due date for paying each instalment.

    If you think you are eligible but have not been advised of an amount, contact us.

    Changing your instalment amount

    You can vary your GST instalment amount for any quarter if you think your total instalments will be more or less than your GST liability for the year, including any wine equalisation tax or luxury car tax liability you may have. You cannot vary your instalment amount to less than $0.

    You vary your GST instalment amount through your activity statement by providing:

    • your estimate of your annual GST liability
    • the amount you want to change to (the varied instalment amount)
    • your reason for varying.

    When you vary your instalment amount, the amount we print on your next activity statement will be based on your varied amount.

    If you vary your GST instalment amount and the total of your instalments (or the estimate you use to work out your instalment for a quarter) is less than 85% of your GST liability for the year, we may impose a penalty.

    If you use the GST instalment amount we work out for you, there will be no penalty, even if the total of these instalments is less than 85% of your GST liability for the year.

    How to work out your variation

    To work out your varied instalment amount for a quarter, you first estimate your total GST liability for the year.

    Your varied instalment amount, together with GST instalments you have paid and other payments of GST, wine equalisation tax and luxury car tax you may have to make for any previous quarters in the year, must be at least the following percentage of your estimated GST liability for the year.

    If your varied instalments are less than 85% of the actual GST instalments you should have paid by the end of the financial year, you may have penalties imposed.

    Four and two instalments

    Quarter

    Four instalments

    Two instalments

    September

    25%

    Not applicable

    December

    50%

    Not applicable

    March

    75%

    75%

    June

    100%

    100%

    See also:

    When to pay your instalments

    The following table lists the payment and lodgment dates for two and four instalments a year.

    Payment and lodgment dates for two and four instalments

    Quarter

    Four instalments

    Two instalments

    September

    28 October

    Not required

    December

    28 February

    Not required

    March

    28 April

    28 April

    June

    28 July

    28 July

    If the due date is on a weekend or a public holiday, you have until the next business day to report and pay.

      Last modified: 24 Aug 2016QC 16380