New To PAYG Instalments? Here’s All You Need To Know.

New To PAYG Instalments Here’s All You Need To Know

Are you unaware of what Pay As You Go (PAYG) instalments are? Do you want to know how PAYG works? When you exceed the entry threshold for business and investment income, the ATO may automatically enrol you in PAYG instalments. Regular prepayments of tax on your business and investment income are known as PAYG instalments.

Things to know before beginning PAYG payments are as follows:

  • ATO will inform you of your entry into the PAYG instalment system, the amount due, and the due dates for deposits.
  • You’ll hear from ATO in the form of a letter in your myGov Inbox, an online business service, or software for standard business reporting.
  • A letter will be mailed to you or your registered agent if none of these services are applicable to your situation.
  • Once the ATO sends you a business activity statement (BAS) or instalment notice, you can begin making payments.
  • The PAYG instalments you paid throughout the year are deducted from your tax when you file your tax return, leaving you with little to no tax to pay.
  • You can vary your PAYG instalments if your circumstances change.

Not only this, based on the instalment income listed in your clients’ most recent filed tax return, they might be added to PAYG instalments. They’ll be able to consistently prepay the tax on their company and investment income by enrolling in PAYG.

It’s a good idea to remind your clients that they can begin making payments whenever ATO gives them a business activity statement (BAS) or instalment notice. They can even view and lodge their PAYG instalment obligations via the online ATO channel.

Talk to your clients about adjusting their PAYG instalments if they anticipate receiving more or less business and investment income for this tax year. Any modifications done must be submitted on or before the payment due date. When adjusting their instalments, make sure your clients don’t undervalue their revenue.

For any professional assistance regarding PAYG instalments, feel free to contact our tax or BAS agents in Geelong.

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