PAYG Instalment Calculator

Amount or Rate

This PAYG instalment calculator checks a quarterly amount from your entries and compares it with a forecast variation. Amount uses the notice figure. Rate multiplies the quarter’s gross instalment income by the entered percentage.

Enter the amount at T7 or the rate at T2 from the client’s notice or activity statement. T2 can contain a rate varied earlier in the year. An estimate you enter remains your assumption. The calculator has no connection to the client’s ATO account.

For the rate method, use gross business and investment income excluding GST. Deducting business expenses from that income produces the wrong instalment base. The ATO’s instalment-income guidance explains the inclusions and exclusions.

Compare an Instalment Variation

An amount variation brings net instalments to the relevant share of forecast annual tax. The shares are 25%, 50%, 75% and 100% across four liable quarters. Earlier variation credits are added back before calculating the next payment.

The default example follows the ATO’s published arithmetic with an anonymous fictional client. Forecast annual tax is $14,000 and the first two instalments total $10,000. In the third liable quarter, $14,000 × 75% - $10,000 = $500. The original $5,000 amount remains beside the $500 variation. Forecast tax less net instalments is $3,500 after that payment.

If the same forecast falls to $8,000, the third-quarter target is $6,000. Earlier instalments of $10,000 produce a potential $4,000 credit and a $0 current payment. Earlier credits already claimed reduce the available credit. A credit is separate from the current instalment and does not establish a cash refund.

For a rate variation, forecast tax divided by annual instalment income gives the varied percentage. The calculator keeps two decimal places by dropping later digits, matching the ATO’s worked example: $10,125 ÷ $82,480 × 100 gives 12.27%. Multiply the quarter’s income by that rate to find its instalment.

When the varied rate is below the rate used previously, the potential credit is earlier instalments less earlier credits and the earlier income recalculated at the varied rate. Enter the rate used for the immediately preceding quarter as Notice rate for this credit comparison. The calculator assumes the earlier instalments are quarterly obligations for this income year, including any still unpaid.

The ATO’s variation rules warn that varied instalments below 85% of actual tax on instalment income can attract general interest charge and penalties. The forecast is not an ATO determination. The calculator cannot establish that test before actual annual tax is known.

Company PAYG Instalments

A company’s instalment uses its own notice amount or rate and its own instalment income. In this fictional company example, quarterly instalment income of $106,000 and an entered 11% rate produce $11,660. Those figures reproduce the ATO’s published company arithmetic.

Select Company to identify the scenario. The arithmetic is the same for an individual with the same entries. Entity and income-year selections do not calculate annual income tax or establish eligibility for a method. Enter forecast tax on instalment income after allowing for the client’s applicable tax rules.

Company tax rates apply when estimating tax on taxable profit. They are not automatically the PAYG instalment rate applied to gross income. Payroll PAYG withholding is a separate calculation and is excluded here.

Check the Activity Statement Figures

Check T7 for the original amount, or T1 and T2 for income and rate. A rate variation uses T3. The current payment is separate from a potential variation credit at 5B.

Use the income year that contains the quarter and include only earlier instalments from that year. Q1 is the first quarter of the client’s income year. For a client first liable in Q3, select Current quarter Q3 and First liable quarter Q3. The amount variation then uses 25%, with zero earlier amounts.

Amounts entered here use whole dollars and calculated instalments drop cents for statement reporting. For example, $28,475 × 1.2% is $341.70, giving a displayed instalment of $341. The forecast balance can be negative when net instalments exceed forecast tax.

This calculator covers quarterly payers. It excludes monthly, annual and twice-yearly instalments, method eligibility and special group calculations. It does not estimate interest, lodge a variation or determine the final tax assessment. Use the IAS guide for statement types and lodgment after checking the amount.

Your entries stay in this browser page and are not saved. Reset example restores the starting figures. Retain your forecast and reconcile the output with the notice before using the amount.