Accounting methods
Instalment notice
An instalment notice is the ATO document, usually sent each quarter, that tells you how much you must pay as a GST or PAYG instalment and when it is due.
An instalment notice is a notification from the ATO stating the amount you must pay as an instalment toward your tax. It is typically issued each quarter for businesses that pay GST instalments, or PAYG instalments using a fixed amount. It shows the period it covers, the amount payable, the due date and the reference you need to make the payment.
Notices are usually delivered electronically through the ATO's online services or to your registered agent, although some may be posted. For this reason, it is important that your contact details and your authorised agent details are up to date. A common problem is a notice going to an old address or an agent no longer acting, leading to missed payments and general interest charge.
The notice is more than a bill. It also gives you a chance to check whether the amount suits your circumstances. If your income has dropped or increased materially, you can ask to vary the instalment, and the notice will often explain how. Always check whether the amount seems reasonable against your current trading. Do not just pay automatically without thinking about whether it still fits.
For businesses with an activity statement, instalment amounts may be incorporated into the statement itself, rather than sent as a separate notice. The principle is the same: you pay the amount shown by the due date. Make sure you use the correct payment reference so that the payment is credited to the right account and period, as errors can cause delays or misallocation.
If you did not receive a notice, you are still generally responsible for paying. Check your ATO online services account, which will show what is outstanding, or ask your agent. Not having the notice is not usually a good reason for non-payment, so look for it before the due date. If you cannot pay, speak to the ATO early about options such as a payment plan.
Keep the instalment notices with your tax records for five years, as they form part of your documentation. This is general information only, so confirm your obligations with the ATO or a registered tax professional.
Worked example
Quinn receives an instalment notice through ATO online services showing a GST instalment of $1,100 for the quarter, due on 28 October, with a payment reference. She checks that her sales this quarter are in line with last year, pays $1,100 through BPAY on 20 October, and files the notice. At year end, she lodges an annual GST return to reconcile the instalments to her actual GST.
Practical tips
- Keep your contact and agent details up to date so notices do not go missing.
- Check the amount against your current trading and ask to vary it if circumstances have changed.
- If no notice arrives, look in your ATO online services account, because the payment is still due.