Pay As You Go

Pay As You Go (PAYG) instalments are a system for paying instalments during the income year towards your expected tax liability on your business and investment income. Your actual tax liability is worked out at the end of the income year when your annual income tax return is assessed. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.

The Tax Office will write to you if you required to pay PAYG instalments.

PAYG instalments are generally paid quarterly, however some taxpayers pay two instalments per year and some have an annual instalment option. The annual instalment is a single, lump sum payment of your PAYG liability for the year. For more information see the PAYG Annual Instalment Fact Sheet. If your company is not eligible to pay an annual instalment, it can pay PAYG instalments quarterly. Each quarter the Tax office will send you an activity statement. The due date for lodging the activity statement and paying any amounts due will be printed on your activity statement. This is also the case if you choose the two instalment option, however this only applies for some primary and special professionals (such as sports professionals and authors). For more information see Instalments Guide for Primary and Special Professionals.

You may pay an instalment amount calculated by the Tax Office, but many taxpayers work out their own instalment amount based on their instalment rate multiplied by their business and investment income. The main advantage of working out your own instalment amount is that your instalments are based on your income as you earn it, instead of a projection based on your previous tax situation.

If you are not registered for PAYG and want to make an estimate of how much tax you should be putting aside every week, please use our tax estimator tool / calculator.

For further information see the PAYG Instalments section of the ATO website.