• Monthly PAYG instalments

    The timing of pay as you go (PAYG) instalments has changed to better align with GST payments. This includes information on:

    Who monthly PAYG instalments apply to

    You will be required to make PAYG instalments monthly rather than quarterly if you have a base assessment instalment income of $20 million or more and you are a:

    • corporate tax entity (company, corporate limited partnership, corporate unit trust or public trading trust)
    • superannuation fund
    • trust
    • sole trader
    • large investor.

    Entities that lodge their GST quarterly or on an annual basis, will only be required to pay monthly if their threshold is equal to or exceeds $100 million.

    When monthly PAYG instalments apply

    We are introducing the change progressively over a four-year period. If you meet or exceed the applicable threshold, you must start making monthly PAYG instalments from the latter of:

    • the date in the following table
    • when your current quarter finishes.

    Table: Thresholds and starting dates

    Entity type


    Starting date

    Corporate tax entities

    $1 billion

    1 January 2014

    $100 million

    1 January 2015

    $20 million

    1 January 2016

    All other entities (including superannuation funds, trusts and individuals)

    $1 billion

    1 January 2016

    $20 million

    1 January 2017

    On the first day of each month, we conduct a monthly payer requirement (MPR) _test to work out which entities must enter pay PAYG instalments monthly. If this applies to your entity, you will receive a letter from us confirming your entry.

    You cannot choose to pay instalments monthly. If you meet the criteria you will be required to account for your instalments monthly, even if your instalment rate is zero.

    You cannot object to being required to account for your PAYG instalments on a monthly basis.

    Find out about:

    Threshold when TOFA applies

    If your entity applies the rules for Taxation of Financial Arrangements (TOFA), you are required to use an adjusted base assessment instalment income.

    See also

    We calculate your adjusted base assessment instalment income using the gross amount of ordinary income from TOFA transactions, not the net gain or loss amount calculated under the rules.

    If your adjusted base assessment instalment income exceeds the threshold, you will need to pay your PAYG instalments monthly. When we can calculate this amount, we will advise entities in October. However, most TOFA entities will need to calculate their adjusted base assessment instalment income in order to determine if they are required to make monthly instalments. If this applies to your entity, you will need to notify us for your inclusion by 30 November each year. This applies for the transitional period until the measure is fully implemented on 1 January 2017.

    To notify us of your inclusion in the monthly measure, phone us on 13 28 66 or send an email to paygimonthlyinstalments@ato.gov.au.

    Calculating your monthly instalment

    If you pay your PAYG instalments on a monthly basis, we will advise you what you need to pay. However there is an additional simplified method for calculating your instalments that you may be entitled to use. This method is designed to reduce the cost of calculating instalments on a monthly basis.

    Find out about:

    Completing your activity statement

    If you have to pay your PAYG instalments on a monthly basis and you currently receive your activity statements quarterly, you will continue to do so up to and including the December quarter. From 1 January 2015, or from the start of your next instalment quarter, you will start receiving activity statements monthly.

    The change to monthly PAYG instalments will not affect your payment cycle for other obligations. For example, if you pay fringe benefits tax quarterly, you will continue to do so once you have started making monthly PAYG instalments.

    Lodging and paying

    Your monthly instalment is due on or before the 21st day of the following month, or, if you are a deferred business activity statement (BAS) payer, by the 28th of the following month.

    If you are a deferred BAS payer for the quarter that ends in December and you are required to enter the monthly measure from 1 January 2015, you will have two payments due in February – one for the December quarter and one for the month of January.

    Lodging electronically

    You must lodge and pay electronically, and you will be penalised if you do not comply with this.

    Find out more

    If your base assessment instalment income falls

    Once you start reporting monthly, you will remain on this cycle until all of the following occur:

    • Your base assessment instalment income falls below $20 million.
    • You have sent us a valid monthly payer (MP) stop notice, which means  
      • you must phone or email us prior to the commencement of your next income year
      • at the MPR test date your base assessment instalment income must be either  
        • less than $20 million
        • less than $100 million if you are a GST quarterly or annual payer.
    • We have accepted your MP stop notice.

    When we receive your monthly payer (MP) stop notice, we will advise you of our decision. If we accept your MP stop notice, you will return to your previous payment cycle at the beginning of your next income year.

    More information

      Last modified: 06 Jul 2016QC 35808