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PAYG Instalments for Sole Traders: How They Work
PAYG (Pay As You Go) instalments are quarterly prepayments toward your annual income tax bill. They're designed to prevent you from facing a large lump-sum tax bill when you lodge your tax return.
When Do PAYG Instalments Start?
The ATO will automatically enrol you in PAYG instalments when your tax bill exceeds $1,000 for the first time. You'll receive a letter with your instalment rate and amount. You can also voluntarily enter the system.
PAYG Instalment Due Dates
- Q1: 28 October
- Q2: 28 February
- Q3: 28 April
- Q4: 28 July
Varying Your Instalment
If your income is lower than expected, you can vary your PAYG instalment down. Be careful — if you vary it too low and end up underpaying, the ATO may charge the GIC (general interest charge).
Estimates only. Your actual instalment rate will be notified by the ATO. Consult a tax agent for advice.