Learn how to report Pay-As-You-Go (PAYG) Instalments on Business Activity Statements (BAS) and Instalment Activity Statements (IAS) in QuickBooks Online.
|Note: In March 2018, QuickBooks started rolling out a new GST experience. This happened gradually over a period of time. If you see View reports menu when you’re on the GST centre main page, you’re in Classic Experience. If you see Run Reports menu, then you’re on the New Experience.|
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 Classic Experience
When you select your PAYG instalment method in Edit GST Settings, your BAS form will include PAYG income tax Instalment section on your BAS, and PAYG tax income tax instalment lines under Amounts you owe the tax office and Amounts the tax office owes you.Values input under the PAYG income tax instalment sections will show figures on your BAS form, but will have no accounting impact post lodgement. You will need to record an adjustment to increase or decrease the balance transferred to BAS suspense upon lodgement.
Any adjustments created will be listed in the related section of the GST Detail report for that period. Adjustment transactions cannot be changed, only deleted.
Reporting PAYG Instalments in the New Experience
In the updated GST experience, 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.