ATO reminder of automatic entry into PAYG instalments

The ATO is reminding business owners that if they earn business and investment income over the ‘entry threshold’, they may be automatically entered into pay as you go ('PAYG') instalments.

Individuals (including sole traders) or trusts will automatically enter the PAYG instalments system if they have:

• instalment income (broadly, being gross business and investment income, excluding GST and any capital gains) from their latest tax return of $4,000 or more;
• tax payable on their latest notice of assessment of $1,000 or more; and
• estimated (notional) tax of $500 or more.

A company or super fund will automatically enter the PAYG instalments system if:

• it has instalment income (see above) from its latest tax return of $2 million or more;
• it has estimated (notional) tax of $500 or more; or
• it is the head company of a consolidated group.

The ATO will let practitioners know when a client has entered the PAYG instalment system, what they need to pay and their lodgement dates.

Clients will then generally lodge their instalments on their business activity statement or instalment notice at the end of each month or quarter.

If clients are entered into PAYG instalments, PAYG instalment data will be included in their income tax pre-filling reports, which can be accessed in both Online services for agents and the Practitioner lodgement service (if using Standard Business Reporting enabled software).

Visit the ATO website for more information.