# Welcome to the PAYG instalment system



## Jack Malarkey (Jan 11, 2016)

Many Uber drivers are discovering the 'delights' of the pay as you go (PAYG) instalment system. If it applies to you (as is likely), you need to pay every quarter not only GST but an instalment of income tax for the current income year.

I recently received from the Australian Taxation Office entitled 'Welcome to the PAYG instalment system'. It reminded me of the Alice Cooper song and album from 1975 entitled 'Welcome to my nightmare'!

You will typically need to pay quarterly instalments if you reported $4,000 or more of GROSS business or investment income (or both) in your latest tax return.

Note that this is gross income (for example, your Uber income before commission or depreciation or other deductions).

Exceptions apply if the tax payable on your latest assessment notice is less than $1,000; OR your 'notional tax' is less than $500; OR you are entitled to the seniors' or pensioners' tax offset.

'Notional tax' is an estimate of the tax payable, excluding capital gains.

If you do have to pay quarterly instalments, you or your tax agent will receive a letter similar to the one I have received.

For more information, see https://www.ato.gov.au/General/PAYG-instalments/Who-needs-to-pay-PAYG-instalments/.


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## clintz (Nov 1, 2016)

unless you are studying accountancy and funnelling (sending) the cash through cayman islands via a complicated system #justsaying #notrecommmended #sorrylatenight


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## RexDaddy71 (Sep 20, 2016)

Generally ....

The PAYG Instalment is a part payment on the PAYG you would have had to pay at the end of the financial year.

It is possible to make an adjustment to the amount of the PAYG Instalment if you aren't expecting to pay as much PAYG at the end of the financial year as predicted by the ATO. But be aware that that there can be penalties if you underestimate by too much.

Ahhh the joys of running a business!

TALK TO A QUALIFIED TAX AGENT FOR PERSONAL ADVICE.


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