PAYG Installment Liability Account

Hi 115mar,

After lodging the BAS, QuickBooks Online will automatically create a journal entry to move the GST Liabilities payable amount to the ATO Clearing account. Once you record the payment in the GST tab, it will be automatically allocated to ATO Clearing account. 

Feel free to message us back if you need further assistance. Have a great day! 

Hello, 

I am having this same problem, but your answer refers to "GST liabilities". The question is about PAYG Instalment liabilities.

I cannot for the life of me, figure out why Quickbooks does not record my payment of the PAYG Instalment when I pay the BAS. 

I thought it would work the same as the GST liabilities account. 

My PAYG Instalment liabilities account is forever going negative even though I've been paying the instalment (through the BAS)

Thanks for joining this thread, maddoglee!

Let me provide some information about PAYG Instalments in QuickBooks Online. When PAYGI is enabled in the GST settings, the PAYG Instalment Liabilities is created. And when you lodge your BAS, QuickBooks Online will automatically create a journal entry against the PAYG Instalment Liabilities account and the ATO Clearing account. 

Furthermore, the journal entry from the lodged BAS offsets any entry you've made for the PAYG Instalment expense. If you wanted to zero out the PAYG Instalment Liability account, you can create a journal entry.

Also, you can check the articles below to learn more about Reporting PAYG Instalments on BAS and IAS and GST Chart of Accounts and Lodgement Journal Overview. 

Feel free to comment below if you need more help. The Community is here to help you.

Hi Sheila, 

Thanks for your quick reply. I understand I can do this as a journal entry, but why would I have to do manual journal entries to zero the instalment account when QB has the information that I have paid the instalment? 

It seems like this part is missing from QB and my PAYG Instalment Liabilities account will keep going further negative for eternity unless I manually create journal entries each time I pay the BAS. 

Is this a 'feature' that QB can work on? 

It seems weird that QB would force me to make these routine manual journal entries.

Hi maddoglee,

By design once a BAS lodgement and payments or refunds are made it will all clear through the ATO Clearing account, and the Liability accounts will track the changes made to each category. Then, once it's year-end financial when you lodge your tax returns and enter any applicable journals those accounts will be cleared.

I'd recommend checking the settings in your GST to verify if PAYG Instalment is correctly set up. Here's how:

1. Click on the GST Center.
2. Click on the Settings button, and select Tax settings.
3. Check if Company Income Tax (PAYG Instalments) is set up correctly like lodging frequency and accounting method.

If you've checked the above and the settings are correct, I'd recommend contacting directly our Customer Care Team to help check your PAYG Instalment Liability account. That way one of our support can check the account in a secure form.

As always feel free to reply on this thread if you have more questions. We'll be sure to get back as soon as we can. Enjoy the rest of the day!

"If you wanted to zero out the PAYG Instalment Liability account, you can create a journal entry."

That makes sense, though can you advise which account should be debited in order to credit the PAYG Instalment Liability account? 

Many Thanks

Hi DC-56,

I'd recommend you to contact your accountant/tax practitioner or a QuickBooks Certified ProAdvisor to help you record which account to use. As they may have a preferred process on entering these kind of entries as we are unable to provide advice on accounting.  

You can find a QuickBooks certified ProAdvisor by searching through this link: https://quickbooks.intuit.com/au/find-a-proadvisor/. 

Let me know in the comment section below if you have any other questions. Have a great day ahead.

I finally figured this one out! 

I had not inputted the actual taxable amount into QBO (PAYG + amount owed to the ATO)

I use an "Income Tax Payable" account to record the actual tax owing to the ATO, then I used journal entries dated at EOFY which split the amounts that I paid to the ATO and the remaining PAYG amount. I could then match those amounts using journal entries to zero out my PAYG Instalment liabilities account. 

My mistake was only recording the debt owed to the ATO, therefore I wasn't recording what I actually had paid the ATO in advance through PAYG. 

I hope this helps someone who has the same problem as I had. 

Thanks for joining this thread and for sharing on how you resolve this one, maddoglee. We appreciate it.

Feel free to post if you need any help with QuickBooks Online. Have a great day! 

Hi maddoglee

Is it possible to show me step by step how you did it. I am struggling to get the answer for how I can record ATO refund/deposit transaction in QuickBooks as that should not go in Profit/loss table. If you guide me that will be greatest help. I am very new to QuickBooks.

Regards

Deepika Madan 

Have you created chart of account for "Income Tax Payable"?

Hi Deepika338, thanks for joining the thread.

I see that you've posted a similar query about recording an ATO refund in a different conversation. With this, I'd recommend visiting the said thread through this link for further details: https://quickbooks.intuit.com/learn-support/en-au/eofy-and-reconciliation/re-how-to-record-company-i....

Feel free to drop a comment below if you have any other questions. 

Yes, I did. Create that account and use a journal to record the tax to be paid.

If you don't mind can you please guide me what journal have you done.

did you created liability account or expense for income tax payable. 

is it same way like gst record do the journal ?