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  • Pay as you go (PAYG) instalments

    Pay as you go (PAYG) instalments is a system for making regular payments towards your expected end of year income tax liability. You report and pay your PAYG instalments on your business activity statement (BAS).

    You'll need to lodge your activity statements and pay all your PAYG instalments before you lodge your tax return. This will make sure your income tax assessment takes into account the instalments you've paid through the year.

    You can generally choose between two options for calculating and paying your PAYG instalments, which will apply for the income year.

    Find out about:

    Option 1 – Instalment amount

    If you choose option 1 'instalment amount', you'll pay the PAYG instalment amount we calculate. We calculate this amount using the business and/or investment income from your most recently assessed income tax return. The benefit of this method is that you'll know the amount of your instalment you need to pay each quarter, without having to work it out yourself, which can help you plan and budget for the payment.

    Option 2 – Instalment rate

    This option allows you to calculate your PAYG instalment amount based on your actual income for that period multiplied by a rate we provide you. The benefit of this method is that your instalments are based on your income as you earn it, instead of a projection based on your tax return. You may prefer this method if your income changes throughout the year.

    PAYG instalment notice

    If you pay PAYG instalments using option 1 ‘instalment amount‘ and have no other obligations that require a BAS, we will send you an instalment notice rather than a BAS. You don't need to lodge this notice (unless you want to vary the amount), you just need to pay the amount shown on the notice, by the due date.

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    Last modified: 17 Jan 2018QC 33680