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Re: PAYG Installements

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I was made redundant and received a lump sum payment for my long service leave that was counted as taxable income. This increased my taxable income so I had to pay about $3,000 tax in addition to my PAYG deductions.

 

I'm 65, and currently have no plans to take another job, but the ATO is demanding quarterly tax payments of nearly $6,000 despite the fact that my residual income (mainly fully-franked shares) and pension are miniscule, and this PAYG installment seems way above any surplus tax I've ever had to pay even when I was actually working

 

Can anyone understand the ATO's logic? 

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ATO Certified

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Hi @Dory

 

these days the ATO systems are mostly automated, so when you lodged your last income tax return the ATO systems would have picked up that you had investment income over $4,000 for that financial year, and auto determined that you qualified for quarterly PAYG.

 

The PAYG installments are based on the tax payable on your estimated taxable income for the next financial year income tax return, which they call notional income.  The notional income is based on your taxable income as per your last return lodged with a small uplift factor.

 

If you have a look at the back of your Quarterly PAYG notice you will see that you can "vary" the amount payable via two options. 

 

If you beleive your circumstances have changed substantially in the current financial year and that you should not be on the PAYG system or you should be on the Annual PAYG system you can give the ATO a call and explain your current circumstances with one of the ATO staff.  They can also walk through the different PAYG variation options with you. You should find that most ATO staff will be receptive and let you know what can be done if anything.

 

Give the ATO a call on 13 28 66

1 REPLY
Highlighted

Best answer

ATO Certified

MVF
Devotee

Replies 0

Hi @Dory

 

these days the ATO systems are mostly automated, so when you lodged your last income tax return the ATO systems would have picked up that you had investment income over $4,000 for that financial year, and auto determined that you qualified for quarterly PAYG.

 

The PAYG installments are based on the tax payable on your estimated taxable income for the next financial year income tax return, which they call notional income.  The notional income is based on your taxable income as per your last return lodged with a small uplift factor.

 

If you have a look at the back of your Quarterly PAYG notice you will see that you can "vary" the amount payable via two options. 

 

If you beleive your circumstances have changed substantially in the current financial year and that you should not be on the PAYG system or you should be on the Annual PAYG system you can give the ATO a call and explain your current circumstances with one of the ATO staff.  They can also walk through the different PAYG variation options with you. You should find that most ATO staff will be receptive and let you know what can be done if anything.

 

Give the ATO a call on 13 28 66

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