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PAYG Instalments

PAYG Instalments

What is PAYG?

Pay as you go (PAYG) Instalments are quarterly pre-payments of your tax that are made to your ATO account. The purpose is to help with your cashflow and pay your tax throughout the year, instead of all at once when we lodge your Tax Return. Your instalment amount is based on your most recent tax return. The payment is due when lodged, so you must put money aside to pay quarterly, rather than at year end. 

When we do prepare your tax return after 30 June, we look at what your PAYG amounts were throughout the year and include that in working out what you owe. If you have paid too much throughout the year, you will get a refund. If you haven’t paid enough- then you will receive one final amount to pay. 


Who gets added to PAYG?

PAYG is a system set up for individuals who are working as their own business (people with an ABN) where it is your responsibility to pay your own tax. If you had a tax bill of $1000 or more last financial year the ATO will automatically put you on PAYG instalments.

For example: If you had a tax bill of $4,000 last financial year, the following financial year the ATO will send you a bill of $1000 each quarter, instead of you having a large bill at the end.

Are there any benefits?

All communications for individuals are set to your details you have supplied to the ATO through MyGov as well as the Practice. It is up to you to be aware of your own tax registrations and pay on time. You can check all your information and PAYG statements on the MYGOV website. This will also give you payment options. We will send through all communications that we receive, but if you have unread MyGov message in your inbox – don’t ignore this.

If your instalments over the year end up being too much for the income you made, you will receive a tax return at the end of the financial year.

Things to consider

Get your MyGov details up to date!

Make sure your details on MyGov are up to date. To update your details log onto the MyGov account and follow the steps from the “My Details” tab.

Payment due dates

Quarter 1 July–September: 28 October

Quarter 2 October–December: 28 February

Quarter 3 January–March: 28 April

Quarter 4  April–June: 28 July

Voluntarily contributing to your Income Tax Account

The best (?) thing about living in the 21st Century is that you can pay directly into your Income Tax Account with your personal BPAY reference and account number. This means that if you aren’t on the system and want to make payments, you can do so. Just send us an email and we’ll be able to send this payment option across to you. This is a great alternative if you don’t trust yourself with a secondary bank account – remember 30% is the great mid-way point to set aside out of your deposits/income.

If you’re feeling stuck

We can access the online ATO tax portal and see where you are at with your tax and PAYG payments. If there is money owing we can set you up on payment plan. We can help you get on top of your tax! On the contrary, if you’re on the PAYG Instalment System and need to re-assess your payments, we can assist you with an Individual Activity Statement to amend this.



Blog by Empire Industry Finance


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