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The small businesses with an annual turnover of less than $2 million may qualify for a range of PAYG instalment concessions. In place of a small business, you may be entitled for the following PAYG instalment concessions:

  • GDP-adjusted instalment amount, which is an amount paid by an individual who pays PAYG instalments on quarterly basis. They can select the instalment amounts after ATO has calculated them based on the business and investment income.
  •  One can select to pay their PAYG instalments using the GDP-adjusted option, if they are a full self-assessment (company or superannuation fund) taxpayer, that is a small business.

First quarter of your income year, you can select the GDP-adjusted instalment option. After that the selected GDP-adjusted instalment option applies for the whole of the income year. If you select this option, you must pay the amount shown at label T7 on your activity statement or instalment notice.

How the ATO works out your instalment amount

The information ATO uses to work out your instalment amount is generally taken from your most recently assessed income tax return. ATO also adjusts your instalment amounts to take expected economy changes (as measured by GDP) into account. If you select to pay the PAYG instalments the ATO determines for you, ATO will estimate your income tax when they process your income tax return in the following way:  

  • If the ATO finds you have made an overpayment, they will refund it to you, provided you have no other tax debts; or
  • If they find the amount you have paid does not fully cover the tax you must pay, you need to make a further payment to cover the shortfall.

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