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  • Introduction to pay as you go (PAYG) instalments

    PAYG instalments are used to collect amounts towards your expected income tax liability on your business and investment income during the income year.

    From 1 July 2014, PAYG instalment thresholds will increase, which may simplify your tax obligations. Increased thresholds may now mean you no longer need to pay instalments.

    Your actual tax liability is worked out at the end of the income year when we assess your annual tax return. Your PAYG instalments are credited against your assessment to work out if you owe more tax or are owed a refund of some of the tax you have paid.

    We will write to tell you if you must pay PAYG instalments.

    When we will ask you to pay PAYG instalments

    We will notify you of an instalment rate if your latest tax return meets certain requirements.

    Individuals

    Generally, individuals who have gross business or investment income of $4,000 or more on their latest tax return will be notified of an instalment rate, unless one of the following applies:

    • the adjusted balance of assessment on your most recent notice of assessment is less than $1,000
    • your notional tax is less than $500
    • you are entitled to the seniors and pensioners tax offset.

    Companies

    Generally, companies and superannuation funds will be notified of an instalment rate if either your:

    • instalment rate is more than 0%
    • notional tax is more than $500 .

    However, if your gross business and investment income is more than $2 million, you may only have the instalment rate option.

    • Last modified: 22 Sep 2014QC 16286