What are PAYG instalments?
Learn what PAYG instalments are and how they help prepay expected tax on business and investment income.
Summary
PAYG instalments are regular prepayments toward expected tax on business and investment income. The ATO may place a taxpayer into the PAYG instalment system based on their circumstances.
What this means
PAYG instalments help spread tax payments through the year. They are not the same as PAYG withholding, which involves withholding tax from certain payments made to workers or others.
Instalments can appear on activity statements or instalment notices.
Typical actions
- Check ATO correspondence about PAYG instalments.
- Understand whether instalments are quarterly or annual.
- Keep cash flow aside for instalment payments.
- Consider whether a variation is appropriate if income changes.
Official ATO sources
Last checked: 20 June 2026
PAYG instalments
Explains PAYG instalments for business and investment income.
When are PAYG instalments due?
Explains due dates for PAYG instalments.
Business activity statements
Explains activity statements where PAYG instalments may be reported.
Related questions
- What is PAYG withholding?
- What is a BAS?
- How is sole trader income taxed?
- What tax obligations does a small business have?
Important notice: Tax Clarity is an independent information tool. This page provides general information based on official sources. It does not provide tax, legal, financial, or accounting advice. Tax rules can change, and how they apply depends on your circumstances. For advice about your situation, speak with a registered tax agent or qualified professional.
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