What is PAYG Instalment?
PAYG Instalments are advance company tax (or income tax for sole traders) paid quarterly via BAS, calculated by the ATO based on prior year tax. Reduces the year-end tax balance.
Current Rate (Quarterly via BAS)
ATO-computed instalment amount or rate × current quarter income
Example
A Pty Ltd with prior year tax of A$40,000 receives a quarterly PAYG instalment of A$10,000. After 4 quarters, the balance reconciles in the company tax return.
Related terms
The Business Activity Statement is the quarterly (or monthly for large businesses) form Australian businesses use to report and pay GST, PAYG withholding, PAYG instalments, FBT instalments and Wine Equalisation Tax. Filed via myGov, ATO Online, or accounting software.
Company Tax is the federal tax Australian companies pay on taxable income. The base rate is 25% for 'base rate entities' (turnover under A$50 million and ≤80% passive income). All other companies pay 30%. There is no separate state-level company tax.
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