According to the ATO, “pay as you go (PAYG) instalments is a system for making regular payments towards your expected end of year income tax liability”. The ATO will automatically enter you into the system if you earn over a certain amount of business and/or investment income.
They work out your instalment amount or rate using information you reported on your last income tax return.
If your amount or rate doesn’t reflect your current financial circumstances, you or your agent can vary it so you don’t pay too much (or too little) income tax for the year.
You can vary your PAYG instalments on your current activity statement or as a revision to a lodged activity statement. You need to do this by the date your instalment is due and before you lodge your income tax return for the year.
Once you’ve lodged a variation, your new PAYG instalment rate or amount will be applied to all your activity statements for the rest of the financial year”.
You can lodge your variation through the myGov portal, the Business Portal or with your registered tax agent.
