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Reporting PAYG Instalments on BAS and IAS

by Intuit• Updated 2 years ago

Learn how to report Pay-As-You-Go (PAYG) Instalments on Business Activity Statements (BAS) and Instalment Activity Statements (IAS) in QuickBooks Online.

What are PAYG Instalments?

Pay as you go (PAYG) Instalments is a system for making regular payments towards your expected annual income tax liability. PAYG instalments are typically reported and paid to the ATO on a quarterly (BAS) or monthly (IAS) basis, the frequency of which is determined by the ATO based on your annual business income.

The ATO will let you know if you need to start paying by instalments under the PAYG instalment system, and before your PAYG instalments are due, they will send an activity statement or instalment notice, depending on your circumstances.

PAYG Instalments are not calculated by QuickBooks, only reported on the business or instalment activity statement.

For more information about PAYG instalments, please consult a tax advisor and/or explore the ATO website links below:

Reporting PAYG Instalments in the GST Centre

When Company Income Tax (PAYG instalments) is enabled in GST Settings, QuickBooks will automatically create a PAYG Instalment Liabilities account, and include PAYGI within your lodgement flow. If you have Enabled BAS E-lodgement for QuickBooks, your PAYG instalment amount will be downloaded automatically and pre-populated in your lodgement.

Check GST Settings to set your reporting frequency (monthly, quarterly, or annually) and set your reporting method (amount or rate) prior to lodgement.

  1. To report your income tax instalment using the amount method, input the amount owed under Income tax instalment amount during the PAYGI filing stage of your activity statement.
  2. Tick the I need to adjust the instalment amount if you need to adjust the figure the ATO is expecting and provide details as to why, or to include credit amounts on your activity statement.

When your activity statement is lodged, QuickBooks will automatically post a journal entry against the PAYG Instalment Liabilities account and the ATO Clearing account.

  1. To report your income tax instalment using the rate method, input your Income tax instalment rate and Income for the period figures during the PAYGI filing stage of your activity statement.
  2. Tick the I need to adjust the instalment rate if you are using a rate other than what the ATO is expecting and provide details as to why, or to include credit amounts expected from the ATO on your activity statement.
  3. When your activity statement is lodged, QuickBooks will automatically post a journal entry against the PAYG Instalment Liabilities account and the ATO Clearing account.
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