• Report and/or pay PAYG instalments quarterly

    Eligible quarterly PAYG instalment payers can choose from the two reporting options outlined below. Your quarter one activity statement will contain a box next to each of the options available to you. Place an X in the box next to the option you choose. If you have already chosen an option, there will be a pre-printed X in the box next to that option.

    Option 1: Pay a PAYG instalment amount quarterly

    Option 1 is available to:

    • all individuals
    • companies and superannuation funds with business or investment income of $2 million or less in their last income tax return, and
    • companies and superannuation funds that are eligible to pay an annual PAYG instalment.

    Under option 1, we calculate the amount you need to pay based on the business and investment income shown on your most recent income tax return (adjusted by a gross domestic product (GDP) amount). You don't need to know how much income you are earning to work out your instalment amount. This is a good option if you have difficulty gathering information in time to calculate your quarterly instalment amount. This option also means you will know the amount of your instalment each quarter, which may help you to plan and budget for the payment.

    Varying your instalment amount

    If you think that using the pre-printed amount at T7 will result in you paying more (or less) than your expected tax liability for the year, you can vary it.

    You may be liable to pay the general interest charge if you vary your PAYG instalment amount down, and end up paying less than 85% of the actual tax that you should have paid on your business and investment income.

    Primary producers and special professionals (such as sports professionals and authors)

    Eligible primary producers and special professionals who choose option 1 pay only two instalments instead of four. Under this arrangement you generally pay 75% of your annual PAYG instalment liability with your activity statement for quarter three (January to March) and the remainder with your quarter four activity statement (April to June).

    For more information, refer to PAYG instalments for primary producers and special professionals (NAT 4352).

    Option 2: Calculate PAYG instalment using income times rate

    This option is available to all taxpayers.

    Under option 2, the amount you pay is based on your actual business and investment income for the quarter, instead of an estimate based on your previous tax situation. This may help your cash flow because instalments go up and down in line with fluctuations in your actual income.

    Varying your instalment rate

    If you think that using the pre-printed rate at T2 will result in you paying more (or less) than your expected tax liability for the year, you can vary it.

    You may be liable to pay the general interest charge if you vary your PAYG instalment amount down, and end up paying less than 85% of the actual tax that you should have paid on your business and investment income.

      Last modified: 06 Jul 2016QC 27149