Most individuals and entities with business or investment income are required to pay Pay As You Go (PAYG) instalments on that income. Depending on certain criteria, quarterly or annual instalments may be made.
PAYG instalments will generally be paid quarterly on the 28th of the month following the end of the quarter. However, these dates may be varied by the ATO who will advise if this is the case.
If a taxpayer's income year ends on a date other than 30 June, the first instalment quarter consists of the first three months of the income year, and so on.
Annual PAYG payments
Taxpayers may pay annually if, at the end of the first instalment quarter for which they are liable to pay an instalment:
the tax liability based on the most recent tax return as notified by the Commissioner of Taxation is less than $8000, and
the taxpayer (or a partnership in which the taxpayer is a partner) are not registered or required to be registered for GST.
Further, if the taxpayer is a company, it must not be involved in a GST joint venture or part of an instalment group. An instalment group is a group of companies that are related to each other according to a majority control test. The group consists of:
a controlling company (not under majority control of another company) that has the majority control of at least one other company, and
each other company under the majority control of that controlling company.
If a business wishes to pay PAYG annually, and it meets the above criteria, the ATO must be notified by the due date for the first instalment for an income year for which it is liable.