The annual instalment is a single lump sum payment towards your expected tax liability on business and/or investment income for the income year. Your PAYG letter will tell you if you are eligible to pay annually. Annual instalments are due on 21 October each year.
The dates in this information are for people with a financial year ending 30 June. If you've been granted a substituted accounting period, different due dates apply.
Eligibility for the annual instalments option
You may be eligible to pay an annual PAYG instalment if, at the end of your first instalment quarter in the income year, you meet the following criteria:
- your most recent notional tax assessment was less than $8,000
- you're registered for GST, and you report and pay GST annually
- you're a partner in a partnership that is registered for GST and reports and pays GST annually
- in the case of a company, you're not part of an instalment group, a head company of a consolidated group or a participant in a GST joint venture.
An instalment group is a group of companies controlled by a head company, unlike consolidated groups, which can include trusts/partnerships as well as companies.
Choosing annual instalments
If you're eligible and you wish to pay annual instalments, you need to advise us by the date on which your first quarterly PAYG instalment would otherwise be due. Your PAYG letter will tell you what this date is. If you don’t advise us by this date, you will have to pay quarterly instalments.
Individuals (including sole traders) with a myGov account linked to the ATO can elect to pay annual instalments online if eligible.
The annual instalment is generally due on 21 October for those with a financial year ending 30 June. If you've been granted a substituted accounting period, then the due dates to lodge and pay your instalment will be different. You need to pay your annual instalment before you lodge your tax return.
If you've already lodged your tax return before paying your PAYG instalment, you still need to pay by 21 October. In this case, you should pay the amount calculated by us shown at T5. You should not vary your instalment amount or calculate your own instalment amount as this may result in the wrong amount being credited towards your income tax account.
You must pay the annual PAYG instalment by the due date. General interest charge (GIC) will apply to any amount not paid by the due date.
You will receive credit for the PAYG instalment amount and the credit will appear on your notice of assessment.
You will continue to pay annual instalments in future years unless your circumstances change or you tell us you no longer want to do so.
If you pay the amount calculated by us and shown at T5 on your instalment notice, you don't need to lodge your notice. Simply pay the amount by 21 October.
If you’re eligible and you wish to pay annual PAYG instalments, you can:
- make your request online if you have a myGovExternal Link account that is linked to the ATO, or
- phone 13 72 26 and follow the prompts.
We will notify you of the outcome of your request. If your request is successful, an annual instalment notice, telling you how much to pay, will be sent to you before the due date.
Choosing annual instalments – for tax agents
If you're a registered tax agent and you have clients who are eligible and wish to pay annual PAYG instalments, you can use our online form, Choosing to pay an annual PAYG instalment. This allows you to transmit details (for up to 20 clients at a time) over the internet, providing you meet the minimum system requirements.
This is a single lump sum payment towards your expected tax liability on business and/or investment income for the income year. You may elect to pay an annual PAYG instalment if you meet certain requirements.