Monthly pay as you go (PAYG) instalments are due by the 21st day of the following month. We will tell you if you have to pay instalments monthly.
You need to pay PAYG instalments monthly if the total instalment income from your most recently lodged tax return is $20 million or more.
If you report GST on a quarterly or annual basis, you will only need to pay PAYG instalments monthly if your business and investment income from your most recently lodged tax return is $100 million or more.
- object to paying PAYG instalments on a monthly basis
- choose to pay PAYG instalments on a monthly basis.
Monthly payer requirement test
We conduct a monthly payer requirement (MPR) test to identify entities that must pay PAYG instalments monthly. We will notify you if you are required to pay monthly.
The test is conducted on the first day of the third-last month of the previous income year. For example, for a company that has an income year ending 30 June, the MPR test is done on 1 April.
Threshold when TOFA applies
If you apply the rules for taxation of financial arrangements (TOFA), we use an adjusted instalment income amount from your most recently lodged tax return to work out if you need to pay instalments monthly. We use the gross amount of ordinary income from TOFA transactions. We do not use the net gain or loss amount calculated under the rules.
If your adjusted instalment income amount is $20 million or more, you need to pay your PAYG instalments monthly.
However, most TOFA entities will need to calculate their adjusted instalment income themselves to determine if they are required to make monthly instalments. You need to tell us before the end of your income year if you are required to pay monthly.
If you need to start paying your PAYG instalments monthly, but you currently receive your activity statements quarterly, you will continue to do so up to and including the final quarter of your income year.
From the beginning of the following income year, you will start receiving your activity statements monthly.
The change to monthly PAYG instalments will not affect your payment cycle for other obligations. For example, if you pay quarterly instalments for fringe benefits tax, you will continue to do so once you have started making monthly PAYG instalments.
You must report and pay monthly PAYG instalments electronically. They are due on or before the 21st day of the following month. If you are a deferred business activity statement (BAS) payer, your payment is due on the 28th day of the following month.
You must calculate your monthly instalments using either the:
Once you start reporting monthly, you will continue to do so until:
- at the MPR test date your instalment income from your most recently lodged tax return is either
- less than $20 million
- less than $100 million and you are a GST quarterly or annual payer
- you have contacted us before the start of your next income year to let us know you will stop paying monthly instalments
- we have accepted your request to stop paying monthly instalments.
If we accept your request to stop paying monthly instalments, you will return to your previous payment cycle (for example, quarterly) at the beginning of your next income year.Monthly PAYG instalments are due by the 21st day of the following month. Generally, only taxpayers with income of $20 million or more pay monthly instalments.