PAYG & it’s Relation To Rental Properties


Rent received from residential and commercial properties is one of the main income sources that count as part of the Pay as you go (PAYG) instalments that are required towards your expected end of year income tax liability. The actual income tax liability is calculated when the Australian Taxation Office assesses your annual tax return.

Other income sources that count as PAYG instalment income include all Business gross income, royalties, bank interest, and Partnership/Trust distributions. The reason these sources are PAYG instalment taxable, is that unlike wage or dividend payments, they have not had previous tax withheld.

Any entity including Individuals, Companies, Sole Traders, Trusts, Partnerships and Self-Managed Superannuation Funds are liable to pay PAYG instalments if their business or investment income is over a certain annual amount.

The Tax Office will inform you when you are required to enter the PAYG instalment system, and usually payments are required on either a monthly, quarterly or annual basis. The instalments can be paid either through a BAS return lodgement, or via an individual payment to the Tax Office at the aforementioned intervals.