The instalment activity statement (IAS) is lodged by individuals and entities not liable to pay GST, WET or LCT, at the end of the reporting period, to report on the following:

• PAYG withholdings

• PAYG instalments

• Fringe benefits tax instalments

A calculation statement for income tax withheld, income tax instalments and fringe benefits tax amounts is also included in the IAS.

The PAYG withholding system provides a standardised way of calculating which types of payment are subject to withholding.

Withholding arrangements generally apply to salary or wage payments made to employees, payments to company directors and other officeholders, and to a range of other payments.

The taxation law classifies withholders as small, medium or large, as follows:

• Small withholders are those who withheld $25,000 or less in the previous financial year

• Medium withholders are those who withheld more than $25,000 but not more than $1 million in the previous financial year

• Large withholders are those who withheld more than $1 million in the previous financial year

The process for preparing an IAS (GB) is the same as that used when preparing a BAS (GA).

The differences between the two forms are that the IAS does not deal with GST but does deal with PAYGI instalments, whereas the BAS does not.

Is this a monthly, quarterly or annual statement?

Enter M for a monthly statement, Q for a quarterly statement, or T where the trustee is reporting TFN withholding amounts under the closely held trust no-TFN withholding rules.

Selecting a PAYG income tax instalment option

Both PAYG options are the same for BAS and IAS payers.

Pay a PAYG Instalment amount option 1: Answer Yes to option 1 for eligible taxpayers to report and pay quarterly the PAYG Instalment amount advised by the ATO.

Calculate PAYG instalment using income tax rate option 2: Answer Yes to option 2 for taxpayers to calculate and pay their PAYG instalment quarterly or annually.

Refer to the PDF version of the Instalment activity statement showing ELS tags and tax codes.