Pay as you go (PAYG) income tax instalment

Pay as you go (PAYG) income tax instalment

PAYG instalments require you to pay incremental amounts towards your expected end of year income tax liability. To make sure your income tax assessment takes into account the instalments you've paid through the year, you need to finalise your PAYG instalments before you lodge your income tax return.

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

Option 1: Instalment amount

This option is a pre-determined amount calculated by us using the business and 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 each quarter, which may 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 multiplied by a rate that we provide to you. The benefit of this method is that the amount you pay reflects your business and investment income for the quarter. You may prefer this method if your income fluctuates.

PAYG instalment notice

In some cases, we may send you an instalment notice rather than a business activity statement (BAS). If you don't want to vary the instalment amount shown on your instalment notice, you only need to pay the amount shown by the due date and you don't need to lodge the notice.

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