You need to know about the PAYG installment system, if you are making a profit from renting your property.
You are required to pay PAYG installments if you earn $4000 or more in rental income and the debt on your income tax assessment, is more than $1000.
The ATO will notify you if you are required to pay PAYG installments and you are usually required to pay installments at the end of each quarter, however in some circumstances, you may eligible to pay your installments annually.
There are two options for paying quarterly installments:
- pay using an installment amount or an installment rate calculated by us (as shown on your activity statement), or
- pay an installment amount or using an installment rate you work out yourself.
• If you receive payments that are subject to withholding (for example, salary or wages) you can contribute towards your expected tax liability for an income year by increasing your rate or amount of withholding.
• That way you can avoid having a tax bill on assessment, which means that you may not be required to pay PAYG instalments.
• To do this, you will need to arrange an upwards variation by entering into an agreement with your payer to increase the rate or amount of withholding.
• You and your payer will need to complete a PAYG withholding variation application (e-variation).
Sunday, 25 November 2018