Have you ever received an email with a document from the ATO about Paying Quarterly or Annual PAYG – Pay As You Go.
If you have never received this in the past then you may be asking why am I receiving this? Good Question.
Generally, the reason is that you had to pay tax last year. This could be related to a sole trader business (ABN) a company (Pty Ltd) or you as an individual because you made money from shares, a managed fund, interest or distribution from a managed fund. It could also be because you had a rental property.
Basically, the ATO wants you to PREPAY tax for the next year.
They can work it on via two methods.
- Take the tax and divide it by 4. Hence if you owed $400 then they send you a quarterly statement for $100.
- They work out a percentage based on your sales.
Either way, they provide the number for you to pay.
This may have happened before to you or this may be the first time…..
What can you do about the PAYG?
There are a couple of things you can do.
- Pay the amount shown
- Vary the amount BEFORE the due date
There are consequences for Varying the Amount on your PAYG
If you vary the amount on the PAYG then we will need to make sure we know the estimated tax for the year end. For example if it says $1000 to pay and we know it will only be $500 then we need to be sure.
[ctt template=”9″ link=”GZ94c” via=”no” ]If you vary the amount on the PAYG then we will need to make sure we know the estimated tax for the year end.[/ctt]
IF YOU VARY AND WE ARE MORE THAN 10% DIFFERENT THEN POTENTIALLY WILL GET FINES AND INTEREST.
I hope this helps you understand the PAYG and the system.
If you have any further questions about PAYG, one of our Shuriken specialists is ready to assist you. Contact us today!