GST instalments¶

GST instalments are one of the options for reporting and paying GST. Instead of working out your exact GST every quarter, you pay a quarterly instalment amount that the ATO works out for you, and then report your actual GST just once a year.

It is a way to spread your GST payments across the year while keeping the paperwork lighter each quarter.

In one line

With GST instalments you pay a quarterly amount the ATO works out, then report your actual GST once a year on an annual GST return.

Why this matters¶

Working out your exact GST every quarter takes time. For some smaller businesses, the GST instalments option means less to do each quarter — you pay the amount the ATO tells you, and settle up once a year. Knowing this option exists helps you have the right conversation about how you report GST.

What you will learn¶

What the GST instalments option is
Who might use it and how the amount is worked out
That you can vary the instalment if your circumstances change

Understanding the concept¶

If you choose the GST instalments option, the ATO explains that two things happen:

Each quarter, you pay a GST instalment amount that the ATO works out. You do not calculate your GST yourself each quarter.
Once a year, you report your actual GST information on an annual GST return. This is where the real figures are settled.

The ATO works out your instalment amount based on the net GST you most recently reported — generally your figures from the past income year. The idea is that the four quarterly instalments together roughly match your GST for the year.

Who might use it. This is an option for eligible businesses. In broad terms, the ATO's eligibility includes carrying on a business with an aggregated turnover under $10 million (or, for organisations that do not carry on a business, a GST turnover of $2 million or less), along with other conditions. Businesses that are voluntarily registered for GST — for example, under the $75,000 threshold but registered anyway — are often the ones looking at annual reporting and instalment options. Whether you are eligible depends on your situation, so check the ATO's eligibility conditions.

You can vary the amount. The instalment the ATO works out is based on your past figures, so it may not match the year you are actually having. The ATO says that if you think the amount will mean you pay more (or less) than your expected GST for the year, you can vary it. Any difference is sorted out when you lodge your annual GST return — either you get a refund or you make a balancing payment.

For accountants & bookkeepers

The GST instalments (Option 3) pathway pairs quarterly ATO-advised instalments with an annual GST return that reconciles actual net GST. The ATO calculates the advised amount from the most recently reported net GST, typically the prior income year. Eligibility (aggregated turnover under $10 million for businesses, GST turnover of $2 million or less for non-business entities, a continuous BAS lodgment record, and not being in a net refund position) sits with the ATO — confirm each client against the current conditions. Variations can be lodged for a quarter but cannot go below $0, and the annual return trues up any over- or under-payment. Keep this lesson conceptual; direct eligibility and election timing questions to the ATO.

Example¶

Jordan runs a small mowing and garden business. His turnover is under the $75,000 threshold, but he registered for GST voluntarily so he can claim GST credits on his fuel, equipment and other costs.

Working out exact GST every quarter felt like a lot for a one-person business, so Jordan looks into the GST instalments option. Under it, the ATO works out a quarterly instalment amount from his past figures. Each quarter Jordan simply pays that amount. Once a year, he lodges an annual GST return with his actual GST for the year, and any difference is settled then.

Midway through the year, Jordan wins a big regular contract and his income jumps well above what the past figures suggested. Because he can vary the instalment, he adjusts the amount up so his quarterly payments stay closer to what he will actually owe — rather than facing a large balancing payment at the end of the year.

Common mistakes¶

Thinking the quarterly instalment is your final GST — the real figures are settled on the annual GST return.
Assuming every business can use instalments — it is an option for eligible businesses only, and eligibility is set by the ATO.
Paying an instalment that no longer fits your year and not varying it, then being surprised by the balancing amount at year end.
Forgetting that if your circumstances change, you can adjust the instalment.

How this works in myaccountant¶

In the app — myaccountant keeps your sales and purchases recorded through the year, so your actual GST figures are ready when it is time to report. That makes it easier to see how your real GST is tracking against the instalment amounts you are paying.

Key points¶

GST instalments are one of the options for reporting and paying GST.
You pay a quarterly instalment amount that the ATO works out for you.
You report your actual GST once a year on an annual GST return.
The ATO bases the amount on your most recently reported GST (usually the past year).
It is for eligible businesses — eligibility is set by the ATO, so check it.
You can vary the instalment if your circumstances change.

Learn next¶

General information only — not tax, super or financial advice.

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