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  • Pay as you go instalments (PAYG)

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    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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    If you make a profit from renting your property, you will need to know about the PAYG instalments system.

    The PAYG instalments system operates from 1 July 2000 and replaces the former provisional tax system. This system requires you to pay instalments during each income year to meet your expected tax liability for that year. You will generally be required to pay PAYG instalments if you earn more than $999 of business or investment income-such as rental income.

    The amount of your instalments will generally be worked out by applying an instalment rate, which the ATO will give you, to your business and investment income for the previous financial year.

    You will usually be required to pay PAYG instalments shortly after the end of each quarter of the financial year. However, you may be able to pay annually if your notional tax is less than $8000. Your notional tax is generally the equivalent of the tax you would have paid on your business and investment income, excluding any capital gain, based on your last income tax assessment.

    If you have previously paid provisional tax, the ATO should have sent you information concerning your rights and obligations under the PAYG system, including information explaining how you can choose to pay your PAYG instalments-annually or as a set amount-and when you must make that choice.

    Last modified: 28 Jul 2003QC 16187