• Complete activity statement - pay as you go (PAYG) instalment option 2 - calculate PAYG instalment using income times rate

    This screen is displayed if you selected the ‘income times rate’ reporting method (option 2) to pay a PAYG instalment.

    The instalment rate advised by us is based on the tax on your business and investment income from your last assessed income tax return. It has been pre-populated in ‘T2’. If you varied the Tax Office instalment rate in a previous quarter of the income year, the rate shown in ‘T2’ will be your latest varied instalment rate.

    You multiply the instalment rate by your instalment income for a quarter or year if you have chosen this option for an annual PAYG instalment notice to work out the amount of your PAYG instalment. There is no need to vary just because your income has gone up or down since your last tax assessment. The instalment rate is a percentage, so the amount you pay will go up or down in keeping with your income.

    You can vary your instalments if you think that using the rate we have provided means you will pay more (or less) than your expected tax for the income year. This function is not available for annual instalment notice or quarterly late lodgers.

    To vary the instalment rate:

    • select the Vary rate button.

      Variations must be completed by the lodgment due date. The Vary rate button is not available if you are lodging after the due date.

      Do not include any decimal point or cent amounts - round this value down to the nearest whole dollar amount. For example, instead of entering $124.75 you would enter $124 only.

    Screen fields:

    T1 PAYG instalment income 

    Enter your instalment income for the quarter. It is used to work out your quarterly PAYG income tax instalment.

    Include all ordinary income you earned from your business or investment activities for the quarter (excluding GST) such as:

    • goods or services that you sell or supply
    • interest received or credited to your bank account
    • gross rent
    • dividends paid or re-invested on your behalf (do not include imputation credits)
    • royalties
    • the gross amount of income where tax has been withheld because you did not provide your tax file number or ABN
    • the gross amount received for diesel fuel rebates (off-road use) (prior to 1July2003)
    • Australian and foreign pensions that are assessable in Australia
    • your proportion of any partnership income
    • your proportion of any trust income, and
    • withdrawals from farm management deposits.

    Do not include income derived from: 

    • GST, wine equalisation tax or luxury car tax you collected
    • input tax credits (amounts at 1B on your activity statement)
    • any income, such as salary, wages or income subject to a PAYG voluntary agreement, from which amounts have been withheld or should have been withheld (other than income from which an amount has been withheld because you did not provide your tax file number)
    • loans received
    • owner's capital
    • diesel and alternative fuels grants (on-road use) (prior to 1 July 2003)
    • capital gains
    • amounts transferred between accounts, or
    • imputation (franking) credits.
     

    T2 Tax Office provided rate 

    This field is pre-populated with your PAYG instalment rate.

    If you accept the Tax Office’s provided instalment rate it will be used to calculate your instalment amount at ‘5A’ by multiplying ‘T1’ by ‘T2’ and rounding to the nearest dollar.

    Select the:

    Go to list button

    to return to the 'Activity statement list’ screen. If you choose this option all of the data you have entered will be lost, unless you have saved this activity statement to your computer.

    Save button

    to save a draft version of this activity statement to your computer. The ‘Complete activity statement – save activity statement’ screen will be displayed.

    Start again button

    to remove any of the details you have entered for this activity statement. The ‘Complete activity statement – activity statement start again’ screen will be displayed.

    View activity statement button

    to view the activity statement you are working on. The details displayed will include your obligations and the values that you have entered.

    Vary rate button

    to vary the rate. The ‘Complete activity statement – Pay as you go (PAYG) instalment – Rate variation entry’ screen will be displayed.

    Next button

    to accept the amount at ‘T2’. The result of ‘T1’ times ‘T2’ will be transferred to ‘5A’ on the ‘Complete activity statement – summary’ screen.

    Back to top

Relying on our information - our commitment to you

We are committed to providing you with advice and guidance you can rely on, so we make every effort to ensure that what we give you is correct.

If you follow our advice or guidance and it turns out to be incorrect, or it is misleading and you make a mistake as a result, we will take that into account when determining what action, if any, we should take.

Some of the advice and guidance on this website applies to a specific financial year. This is clearly marked. Make sure you have the information for the right year before making decisions based on that information.

If you feel that our advice and guidance does not fully cover your circumstances, or you are unsure how it applies to you, contact us or seek professional advice.

Copyright

© Australian Taxation Office for the Commonwealth of Australia

You are free to copy, adapt, modify, transmit and distribute this material as you wish (but not in any way that suggests the ATO or the Commonwealth endorses you or any of your services or products).