GST, Income Tax, PAYGW, and PAYGI
When you start your own business, sometimes it becomes really hectic in the start to sort out the cash flow of your company, which payment you need to be aware of before time, which payment is due and which payment is already paid. Tax calculations can always increase the complications if you are not aware of the all the tax obligations beforehand you might not be able to make the correct payment.
4 Tax Elements
So we will be talking about four tax elements in this article that you need to be aware of. 1st Income tax, 2nd GST (Goods and Services Tax), 3rd PAYGW (Pay As You Go Withholding) and 4th PAYGI (Pay As You Go Instalments)
1 – Income Tax
The Australian tax system depends on the income tax that is applied to Income from salaries and profits. Income tax is applied to Income driven from a person working and receiving a salary or Income from an investment. Income not only in form of money but in situation good and services can be considered as income. ATO divides Income into three classifications
Assessable Income
Assessable income can be income that you receive as salary and wages, pensions, sales commissions, tips, interest on bank account, allowance for car, clothes, and travel. As well as rental income and income from investments.
Exempt Income
Exempt Income includes some government pensions and payments, including the invalidity pension as well as some education payments.
Taxable Income
Taxable income is simply your assessable minus the allowable deductions.
2 – GST
It is the additional 10% cost you pay for the most goods, services and other products consumed or sold in Australia. As a Business, you pay GST on your purchases and collect GST on your sales from your customers.
3 – PAYGW
Pay as you go has two sets the PAYGW and PAYGI. PAYGW is the amount you are to withhold from the salaries of your employees to help them with their tax liabilities.
4 – PAYGI
While PAYGI is for people that earn through their own business and have an ABN number
Income tax
Key lodgement and payment dates for business – income tax returns.
These dates apply to entities that balance on 30 June, (at the end of the Australian financial year). They do not apply to entities that use a substituted accounting period.
31 October
Individual, partnership and trust income tax returns due:
Income tax returns for trusts that were either taxable or non-taxable medium to large taxpayers in the last year they lodged and have one or more prior year returns overdue as at 30 June in the previous financial year.
Income tax returns for Trusts where the previous financial year income tax return was not lodged by the due date.
Exception – new registrant trusts from the previous financial year can lodge by 28 February unless required earlier.
Income tax return lodgement due date for all June balancing companies where:
The previous financial year income tax return was not lodged on time, or one or more prior-year returns were overdue as at 30 June of the previous financial year.
1 December
Income tax lodgement date for non-full assessment company entities.
Payment date is as per the notice of assessment.
Income tax payment due date for companies that were:
Taxable medium to large taxpayers in the immediate prior year required to lodge by 31 October.
15 January
Lodgement due date for income tax returns for companies, and trusts that were taxable medium to large business clients in the prior year and are not required to lodge earlier.
28 February
Income tax return lodgement due date for:
medium to large trusts that were non-taxable in the latest year lodged unless required earlier new registrant trusts unless required earlier self-preparing taxpayers that were not due at an earlier date.
If you fail to lodge your return for the previous financial year on time your income tax return for the current financial year will be due by 31 October.
GST annual returns and instalments
28 July
GST instalments
Quarter 4 (April–June) instalment notices (forms S and T).
Final date for payment and, if varying the instalment amount, lodgment.
21 August
Final date for eligible monthly GST reporters to elect to report GST annually.
28 October
GST instalments:
Final date for electing to pay GST by instalments (that is, option 3) for June balancers if another reporting option was previously used.
Final date for opting out of option 3 for the current financial year.
Quarter 1 (July–September) instalment notices (forms S and T) – final date for payment and, if varying the instalment amount, lodgement.
Final date for eligible quarterly GST reporters to elect to report GST annually.
31 October
Annual GST return or Annual GST information report – lodgement and payment is due when your income tax return is due:
If you use a tax agent, different due dates may apply.
28 February
Annual GST return or Annual GST information report:
final date for lodgement and payment (if required) if you do not have an income tax return lodgement obligation
GST instalments
Quarter 2 (October–December) instalment notices (forms S and T) – final date for payment and, if varying the instalment amount, lodgement.
28 April
GST instalments.
Quarter 3 (January–March) instalment notices (forms S and T) – final date for payment and, if varying the instalment amount, lodgement.
Activity statements
The final date for lodgement and payment for:
Monthly activity statements – due on the 21st of each month.
Quarter PAYG instalment activity statement for head companies of consolidated groups:
Quarter 4 (April – June) –due 21 July
Quarter 1 (July–September) – due 21 October
Quarter 2 (October–December)– due 21 January
Quarter 3 (January–March) – due 21 April
Quarter activity statements lodged electronically:
Quarter 4 (April–June) – due 11 August
Quarter 1 (July–September) – due 11 November
Quarter 2 (October–December) – due 28 February
Quarter 3 (January–March) – due 12 May
Refer to two week deferral offer for information on your eligibility for this later due date.
All other Quarter activity statements
Quarter 4 (April–June) -– due 28 July
Quarter 1 (July–September) – due 28 October
Quarter 2 (October–December) – due 28 February
Quarter 3 (January-March) – due 28 April Fringe benefits tax return
The fringe benefits tax (FBT) year runs from 1 April to 31 March.
If you have an FBT liability during that year, you must lodge an FBT return and pay the total FBT amount you owe for the year by 21 May.
If a tax agent is preparing your FBT return, different lodgement arrangements may apply – your agent will tell you.
