• Prepare activity statement - pay as you go (PAYG) instalment

    This section only displays if you have a PAYG instalment obligation for the instalment notice or activity statement.

    You can generally choose between two options for calculating and paying your PAYG instalments:

    • Pay a PAYG instalment amount.
    • Calculate your PAYG instalment using income times rate.

    If you are eligible, you will need to select an option. For quarterly instalments, once you have chosen an option you will not be able to change this for the rest of the income year.

    For information on completing this section, select from the options below:

    PAYG instalment amount

    These fields are displayed if you selected the reporting method to pay a PAYG instalment amount.

    The instalment amount is based on the information provided on your last assessed income tax return or varied by you in a previous quarter.

    If the amount is correct

    If you agree that this amount is correct: select the:

    • Save and continue button if you have other tax reporting obligations, or the
    • Continue button if you only have instalments to report.

    The amount will be transferred to 5A on the activity statement.  

    If the amount is not correct

    You can vary your instalment if you think that using the amount we have provided means you will pay more (or less) than your expected tax for the income year. This may be because of significant changes in your income or tax situation, such as:

    • reducing or expanding a share portfolio (or receiving significantly lower or higher dividends from a share portfolio)
    • using savings or investments for private purposes, reducing the amount of income you receive
    • selling or buying an investment property (or receiving more or less rent from a property)
    • ceasing to earn income from business activities
    • having much higher or lower expected tax deductions for about the same level of investment and business income, or
    • having less, or more, investment and business income but about the same level of expected tax deductions – for example, because your running costs are about the same, or having repaid all you owe under the Higher Education Loan Program (HELP) or Student Financial Supplement Scheme (SFSS).

    To vary the amount: 

    • select the Vary PAYG instalment button
    • if you are on quarterly instalments, enter your new estimated tax for the year at T8 
    • if you are on annual instalments, enter the varied instalment amount for the period at T6 
    • choose a reason for variation at T4 
    • Select the
      • Save and continue button if you have other tax reporting obligations), or
      • check the declaration box and select the submit button (if you only have instalments to report and are ready to submit the instalment notice).
       

    If you are a quarterly instalment payer, the varied amount will appear on future activity statements for the income year, unless you lodge another variation.

    Round this value down to the nearest whole dollar amount. So instead of entering $124.75 you would enter $124 only.

    Variations to the instalment amount must be completed by the lodgment due date.

    PAYG instalment rate

    These fields are displayed if you selected the Calculate by Rate reporting method to pay a PAYG instalment.

    • Enter your PAYG instalment income at T1.

    For information, including what to include at T1, see T1: PAYG instalment income 

    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.

    The instalment rate has been pre-populated in T2. We have calculated this based on the tax on your business and investment income from your last assessed income tax return. If you varied the ATO instalment rate in a previous quarter of the income year the rate shown in T2 will be your latest varied instalment rate.

    Your PAYG instalment income (T1) will be multiplied by the instalment rate (T2) to work out your PAYG instalment amount.

    Varying the instalment rate

    You can vary your instalment rate 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.

    Usually you would vary your instalment rate only if there is a significant change in the proportion of your investment and business income that will be paid as tax – for example:

    • having much higher or lower than expected tax deductions for a similar level of investment and business income, or
    • having less or more investment and business income for the same level of expected tax deductions (for example, because your running costs are about the same).

    To vary the instalment rate: 

    • select Yes at Do you want to vary the instalment rate? 
    • enter your new rate at T3 
    • choose a reason for variation at T4 
    • if you have other tax reporting obligations select the Save and continue button, or
    • check the declaration box and select the submit button if you only have instalments to report and are ready to submit the instalment notice.

    Variations must be completed by the lodgment due date. The Vary the instalment rate button is not available:

    • on an annual instalment notice
    • if you are lodging after the due date.

    Claiming a credit for overpayment of instalments

    If eligible, you will be provided the option to claim a credit for overpayment of instalments reported in previous quarters based on the variation data that you supplied and the instalment amounts that you have reported so far in the year.

    To claim a credit: 

    • enter an amount at 5B 
    • if you have other tax reporting obligations select the Save and continue button
    • check the declaration box and select the submit button if you only have instalments to report and are ready to submit the instalment notice.

    Even if you are entitled to a credit, you do not have to claim it in your activity statement. Any overpayment of your PAYG instalments will be credited to you when your annual income tax return is assessed. If you prefer not to claim a credit in your activity statement select the Next button.

    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

    The fields will vary depending on whether you have received a quarterly instalment or an annual instalment.

    Quarterly instalment amount

    T7 PAYG Instalment amount 

    This field is pre-populated with your quarterly PAYG income tax instalment calculated by us.

    T8 Estimated tax for the year 

    This field is displayed if you are varying your instalment amount.

    Enter your estimate of the tax on your business and investment income for the year. After you have completed this screen, we will use your estimate for the year to calculate your quarterly instalment for you. 

    You may be liable to a penalty if you vary and underestimate your tax by more than 15%.

    T9 Varied amount payable for period 

    This pre-populated field is displayed if you are varying your instalment amount. This is the amount payable for the quarter based on the new annual estimate entered at T8.

    T4 Reason for variation 

    This field is displayed if you are varying your instalment amount. Select the reason for variation from the list provided.

    Annual instalment amount

    T5 Tax Office supplied instalment amount 

    This field is pre-populated with your annual PAYG income tax instalment calculated by us.

    T6 Varied instalment amount 

    This field is displayed if you are varying your instalment amount. Enter your estimated tax on your business and investment income for the year.

    You may be liable to a penalty if you vary and underestimate your tax by more than 15%.

    T4 Reason for variation 

    This field is displayed if you are varying your instalment amount. Select the reason for variation from the list provided.

    Quarterly instalment rate

    T1 PAYG instalment income 

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

    For information, including what to include at T1, see T1: PAYG instalment income 

    T2 Tax Office provided rate 

    This field is pre-populated with your PAYG instalment rate calculated by the ATO or your most recent varied rate.

    If you accept our 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.

    T3 New varied rate 

    This field is displayed if you are varying your instalment rate.

    Your varied instalment rate equals the estimated tax on your business and investment income for the year divided by your estimated instalment income for the year.

    You may be liable to a penalty if you vary and underestimate your tax by more than 15%.

    T4 Reason for variation 

    This field is displayed if you are varying your instalment rate. Select the reason for variation from the list provided.

    Annual instalment rate

    T1 PAYG instalment income  

    Enter your instalment income for the year, as it is used to work out your PAYG income tax instalment.

    For information, including what to include at T1, see T1: PAYG instalment income 

    T2 Tax Office provided rate  

    This field is pre-populated with your PAYG instalment rate calculated by the ATO or your most recent varied rate.

    It will be used to calculate your instalment amount at 5A by multiplying T1 by T2 and rounding to the nearest dollar.

    Credit from variation

    5B Credit from PAYG income tax instalment variation 

    Enter the amount you want to claim for overpaid instalments. The amount entered cannot be greater than the maximum amount calculated by us.

    Screen buttons

    Accept and pay

    Accept and pay accepts the quarterly PAYG instalment amount worked out by us.

    Vary instalment

    This radio button allows you to vary the PAYG instalment amount or rate.

    The Vary button is not available if you are lodging after the due date.

    Cancel

    Selecting Cancel will return you to the Activity statement list screen. If you choose this option all of the data you have entered will be lost.

    Save and exit

    Save and exit saves of the details you have entered for this activity statement. The Activity Statement save was successful screen will be displayed.

    Save and continue

    Saves the details you have entered for this activity statement and returns you to the Prepare activity statement screen.

    Continue

    Acknowledges that you accept the details on the instalment notice and finalises without any changes.

    Declaration box

    Selecting this box declares that you are signing the instalment notice using the details you used to log in.

    Submit

    Submits the instalment notice to the ATO.


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).