• PAYG instalments for primary producers and special professionals

    Pay as you go (PAYG) instalments are used to collect amounts towards your expected tax liability on your business and investment income during the income year.

    Your actual tax liability is worked out at the end of the income year when we assess your annual tax return. Your PAYG instalments for the year are credited against your assessment to work out if you need to pay more tax or are due a refund.

    The dates given are based on a balancing date of 30 June, which is when the majority of taxpayers in Australia balance their accounts.

    Find out about:

    Payment options

    Different payment schedules are available allowing your PAYG instalment amounts to match changes in your income.

    Depending on your circumstances, you can pay:

    We will write to you and tell you which options are available to you.

    Whichever option you use to calculate your PAYG instalments, if your circumstances change, you can vary the amount you pay for the current income year.

    See also:

    Quarterly instalments

    If you prefer to pay quarterly instalments, you will need to work out your PAYG instalments based on your instalment rate multiplied by your instalment income, being your business and investment income.

    To do this, you pay a proportion of your instalment income for the quarter. You work out the amount to pay using your instalment rate, which is shown on your activity statement. If you pay quarterly and your circumstances change you can vary your instalment rate.

    To work out your quarterly instalments use:

    Instalment income ($) x instalment rate (%)  =  instalment amount ($)

    If you are eligible to pay two instalments and you choose to pay the amount worked out for you by us, you cannot choose to pay quarterly instalments.

    If you want to pay quarterly instalments instead of two quarterly payments, you must notify us of this change by the date your first instalment would be due. If you don’t advise us by the due date, you will continue to pay two instalments per year.

    The due date for the first quarter is on or before 28 October.

    If you choose to pay quarterly using the instalment rate multiplied by your instalment income, you must continue to do this unless your circumstances change or you advise us that you no longer want to pay quarterly.

    Two instalments

    Some primary producers and special professionals can pay two instalment amounts per year. You are eligible to pay two instalments in an income year if all of the following apply to you:

    • you are a quarterly PAYG instalment payer and have decided to pay an amount worked out for you by us
    • you are an individual carrying on a primary production business or you are a special professional, such as an author, inventor, performing artist, production associate or sportsperson
    • your gross primary production income or special professional income was more than your deductions for that income on your most recent tax return, that is your net income from that income source in your most recent assessed income year was at least $1.

    To work out your net income:

    • any carried forward losses are ignored
    • net farm management deposits and withdrawals are included if withdrawals exceed deposits.

    We will tell you if you are eligible to pay PAYG in two instalments.

    If you pay two instalments, we work out your instalment amounts for you using your gross domestic product (GDP) adjusted notional tax. You pay 75% of your GDP adjusted tax by 28 April and the remainder by 28 July.

    If you choose to pay instalments using the amounts worked out by us, you must continue to do this unless your circumstances change or you tell us you no longer want to pay in two instalments.

    See also:

    Annual instalment

    An annual instalment is one lump sum payment toward your expected tax liability on your business and investment income for the income year.

    You are eligible to pay PAYG instalments annually if you are an individual and the following conditions apply:

    • your most recent notional tax was less than $8,000
    • if you are registered for goods and services tax (GST), you report and pay GST annually
    • if you are a partner in a partnership registered for the GST, the partnership reports and pays GST annually.

    We will tell you if you are eligible to pay PAYG annually.

    If you are eligible to pay annually and want to do so, you must advise us by the date your first quarterly PAYG instalment would be due. If you don’t tell us by this date you will have to pay quarterly instalments.

    When it is time to make your annual payment, we will send you a notice telling you how much to pay. Payment is normally due on 21 October following the end of the income year.

    If you choose to pay annually, you must continue to do this unless your circumstances change or you tell us you no longer want to pay annually.

    See also:

    Changing the amount you pay

    You can vary your instalments if you believe the amount or rate we worked out will result in you paying more, or less, than your expected tax liability.

    If you usually pay the amount we worked out for you, you vary your instalment amount by estimating the tax on your business and investment income.

    If you're a quarterly payer using the instalment income x instalment rate method, you vary your instalment amount by varying your instalment rate.

    If you varied your instalment amount or rate and it is less than 85% of the amount or rate that would have covered your actual tax liability for the year, you may have to pay interest.

    See also:

    Lodging an annual tax return

    You must lodge an annual tax return, even if you have met your PAYG instalment obligations.

    To make sure you receive the correct amount of credit in your assessment, finalise your PAYG instalments before you lodge your tax return.

    See also:

    Contact us

    For more information about PAYG payment options available to primary producers and special professionals:

    • phone us on 13 28 66
    • write to us at
      • Australian Taxation Office
        PO Box 1032
        ALBURY NSW 2640
       

    If you do not speak English well and need help from us, phone the Translating and Interpreting Service on 13 14 50.

    If you are deaf, or have a hearing or speech impairment, phone us through the National Relay Service (NRS) on the numbers listed below:

    • TTY users, phone 13 36 77 and ask for the ATO number you need
    • Speak and Listen (speech-to-speech relay) users, phone 1300 555 727 and ask for the ATO number you need
    • internet relay users, connect to the NRSExternal Link and ask for the ATO number you need.
      Last modified: 24 Aug 2016QC 16375