For instance, if you are a company or super fund, you will need to complete PAYG instalments if the ATO calculates an instalment rate of above zero for your GST-registered organisations. It is important to note however, that there are special rules and exceptions that apply to PAYG instalments for different business and company structures, trusts, primary producers and consolidated groups. But generally, it will apply to individuals, organisations or trusts who earn a certain amount of individual, gross business or investment outcome.

The ATO will write to you should you need to make these payments. These quarterly payments go towards the expected income tax obligation accumulated from your business and investment income for the current financial year. This system allows you and your business to meet your income tax obligations by making payments at the end of each quarter of the year. Rather than pay a large tax bill at EOFY, the instalments are spread out over the course of the year making it easier to meet taxation obligations. The PAYG tax system allows employers to vary the amount of tax that is withheld from employees on each payment instalment, withholding some of this to anticipate the end of year tax liability.

It is an acronym used for two different processes systemised by the Australian Tax Office (ATO) for businesses in Australia: PAYG instalments and PAYG withholding.

But simply put, ‘PAYG’ stands for ‘Pay As You Go’. We often get asked about PAYG and how that affects a business.

Pay g online