PAYG income tax instalment

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PAYG income tax instalment

Hello

 

I'm trying to set up an account number under "Liability" for PAYG income tax instalments each quarter.  I'm only taking a stab in the dark as to how I would get the system to recognise it as a 5A/T7 entry on my BAS summary when I select the report from the list "GST report for activity statement".

 

I thought I would maybe have to set myself as an employee first.

 

Is this do-able... or not?  Does Essentials Accounting have this capability or am I barking up the wrong tree?

 

Attached is a snapshot that hopefully explains what I'm trying to achieve.

 

Hope someone can shed some light on this for me please.

PAYG income tax.PNG
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Re: PAYG income tax instalment

Hi @AlfR 

 

Thanks for your post. PAYG Income Instalments are prepayments on your tax bill and based on the income of the business/investments. When your accountant lodges the FY tax return the total paid in instalments is deducted from your tax bill, reducing what you have to pay in one lump sum. PAYG Withholding tax is the tax that employers withhold from employees wages and forward on to the ATO. So if you are required to pay PAYG Income instalments you don't do this through payroll.

 

Generally the ATO will advise you of the PAYG instalment amount you need to pay, either as part of your BAS or as a separate Instalment notice. If you receive a separate instalment notice, you would just need to pay that amount then record a Spend Money transaction for that payment. You may need to check with your accountant about the PAYG Instalment allocation account.

 

If the instalment amount is included in your BAS, this will be prefilled when you lodge your BAS through the ATO portal so you will not need to include it in the GST report for activity statement. In Essentials you will only need to allocate that amount when you record your BAS payment/refund transaction. This help article explains how to record that Spend Money transaction: Recording ATO payments and refunds 

 

Please do let me know if you need further help.

 

If my response has answered your enquiry please click "Accept as Solution" to assist other users find this information.

Cheers,
Tracey
Previously @bungy15

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Re: PAYG income tax instalment

Thanks Tracey

 

I'll follow what you've recommended and will put it in place this coming quarter.  I was speaking to the MYOB Help Line on another issue yesterday and I mentioned this topic... this is when I found your reply... I'm a novice at these community responses.  Didn't realise you had replied soon after my post.

 

The MYOB agent seemed to see some merit in what I was trying to do [have the PAYG income instalments listed on the summary report.  5A and maybe the 5B] and suggested I reply and ask other uses to reply / like the idea and MYOB would take a closer look at it.  Not sure why the person couldn't just report it up the line, but anyway here I am... asking if others would like this to be a feature included in MYOB, please like/reply.

 

Until there is an update including this topic I'll have to record it as you suggested.

 

Cheers

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Re: PAYG income tax instalment

@AlfR @Tracey_H 

 

Alf,

 

I have a Current Asset called PAYG - I.

 

You screenshot indicates that you have lodged your 2019 Tax Return.

 

It does not indicate when you entered the PAYG Instalment system.

Following lodgement of each tax return where a profit is recorded (with no carried forward loss), the ATO will issue a PAYG Instalment letter.

 

Given the current economic system, the ATO has allowed variation of PAYG - I without penalty or review.

Have a talk to your Tax Accountant, if you think the PAYG - I is too high.

 

Duncan

Duncan Smith
Business Advice + Tax
Helping business owners build a better business since 1998
E expressgst@optusnet.com.au T 02 9904 3672 7 days

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