Today’s blog will cover every aspect related to PAYG instalments. Through this blog, you’ll come to know when PAYG instalments are due and the options available to you and which lodgment cycle applies to you.
Which Lodgment Cycle Applies to You?
When you first enter PAYG instalments, you’ll receive a letter either by post or through myGov explaining how often you need to lodge and pay for most taxpayers.
- Most of the taxpayers like to pay on a quarterly basis.
- Based on your situation, the letter may give you the choice to make 2 instalments per year or one annual instalment.
- If the businesses have an instalment income of above $20 million, they need to lodge and pay their PAYG instalments on a monthly basis.
On your activity statement or instalment notice, you can see the due date for your next PAYG instalment. Be sure to file all your activity statements and pay your instalments before you file your tax return. The instalments you need to pay throughout the year will then be considered in your tax assessment.
The ATO will issue your activity statement at the end of each quarter. The due dates are as follows:
- Quarter 1: July – September due by October 28th
- Quarter 2: October – December due by February 28th
- Quarter 3: January – March due by April 28th
- Quarter 4: April – June due by July 28th.
If you get an activity statement and:
- If you lodge online, you may get a two-week extension for lodging electronically.
- But if you pay GST monthly, your due date remains the 21st of each month with no extension for electronic lodgment.
If you get an instalment notice and pay the amount mentioned on the notice, you are not required to file it – just make the instalment amount by the due date.
- You’ll need to pay 75% of your yearly PAYG instalments by April 28
- the remainder by July 28th.
You need to pay using instalment amount if you’re a two – instalment payer.
You can pay in 2 instalments:
- If you’re a quarterly PAYG instalment payer
- And, either a primary production business owner or a special professional, like an author, artist or sports person.
Changing to Quarterly Instalments
You can change your instalments:
- from bi-annual to quarterly instalments
Changing from bi-annual to quarterly instalments, lodge your activity statement by the first instalment due date and switch to using the instalment rate to calculate your instalments.
- from annual to quarterly instalments
If you’re shifting from annual to quarterly instalments, the ATO will notify you in your tax return. You’ll start quarterly instalments at the beginning of the next income year. When it’s time for your annual payment, the ATO will send you an instalment notice.
If you are a self-preparer, you can skip this and simply lodge your tax return by October 31st.
If You Use a Tax Agent
- Remember to pay your annual instalment by October 21st
- Ensure it’s paid before your tax return is lodged.
Before filing your return, make sure to pay your annual instalment so the ATO can credit the right amount in your income tax assessment. However, if your tax return accountant files your return prior to October 21st:
- you must pay the amount on your PAYG instalment notice by October 21
- don’t file the instalment notice or change your instalment amount.
Want to pay annually?
You can confirm this choice through your myGov account. Remember, you must confirm by your first quarterly instalment due date.
You’re eligible for annual PAYG instalments:
- If your estimated tax is less than $8,000
- You either
- are not required to register for GST
- or you’re voluntarily remitting GST annually
- you’re not part of certain corporate structures.
The blog covers important aspects related to PAYG instalments along with their due dates. Stay informed and meet your PAYG instalment obligations. If you don’t know how to lodge PAYG instalments, then you can also contact Reliable Melbourne Accountants.
For more information watch out this video