PAYG instalments

(Initiate)Initiate

25 Nov 2025

Hi,

I have a somewhat a complicated situation that involves my late mum's estate. There was a matter which was taken time to fully close in the courts. She was one of the investors in this. She had passed over a decade and I am now receiving partial payments from this which I had reported in my tax returns.

Due to this ATO had put me on PAYG tax instalments because this is treated as investment incomes. The trouble was for the third and hopefully final payment I simply do not know how much I would be receiving. This would be decided by the court and whatever expenses the administrator has incurred.

I have recently learned that when you adjust your PAYG instalments you can no longer just reduce it to Nil if the actual tax paid is higher, in that you could be charged with penalty interests. I adjusted the last quarter instalment to a small amount as I simply do not know what the final amount would be.

Is someone from the ATO able to help with this? I have trauma dealing with this from such a long time and I just wanted this to go away yet it haunts me.

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KaraATO

(Community Support)Community Support

26 Nov 2025

Hi @ddk,

When you vary your PAYG instalments, you need to ensure your total payments for the year are at least 85% of your actual tax liability to avoid penalty interest. Since you can't predict the final payment amount from the estate, it's a good idea to set it up to take even a small amount for last quarter rather than nil.

You can use the PAYG instalment calculator on our website to estimate payments based on conservative income projections.

When you lodge your tax return, any excess PAYG instalments will be credited against your income tax and refunded if there's an overpayment.

If you're still unsure, you can phone our business line to discuss your specific circumstances and options.

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