IAS stands for Instalment Activity Statement. Not to be confused with your BAS.

Instalment Activity Statement

The Instalment Activity Statement (IAS) covers PAYG instalments, PAYG withholding and ABN withholding. These three – nothing else. So no GST.

PAYG Instalments

The ATO will tell you whether you need to pay PAYG instalments and when. The amount and timing will depend on your instalment income and notional tax in your latest tax return.

Your instalment income includes dividends, interest, profits you made as a sole trader or through a partnership and other income that is not subject to any other withholding, but excluding capital gains. Your notional tax is the estimated tax you are to pay on that instalment income.

You pay your instalments either monthly, quarterly or annually. 

PAYG Withholding

When you do PAYG withholding, you fall into one of three categories of withholders. You are either a small, medium or large withholder.

If  you have $25,000 or less of PAYG withholding a year, you are a small withholder. You are a large withholder if you withhold more than a $1m a year. And you are a medium withholder if you sit in the middle, so over $25,000 up to $1m. 

Which type of withholder you are will determine how often you have to report and pay the PAYG you withheld.

As a small withholder you report and pay quarterly – through your IAS if not registered for GST or through your BAS if registered for GST.

As a medium withholder you report and pay monthly – through your IAS if not registered for GST and through your quarterly BAS and monthly IAS for those months in between if you are registered for GST.

Different rules apply to large withholders but let’s put those aside.

ABN Withholding

If a supplier does not provide an ABN to you for goods and services of more than $75 (excluding GST), you need to withhold the top rate of tax from the payment. 

IAS v BAS

If you are not registered for GST, you don’t have any Business Activity Statements (BAS) to worry about. All your reporting is done through an IAS – either monthly, quarterly or annually.

But if you are registered for GST, then it gets more complicated, especially if your GST and PAYG instalments or withholding are on different reporting cycles.

You might do your BAS quarterly but might be a medium withholder for PAYG Withholding and hence need to report PAYG W on a monthly basis. In that case you do both. You lodge your BAS quarterly, but then lodge an IAS for the months in between.

Does this make sense so far? Just call me if you get stuck. My number is 0407 909 779. I am Heide.

 

MORE

Super Death Tax

Cloud Accounting Software

Accounting Tips for Your Business

 

Disclaimer: numba does not provide specific financial or tax advice in this article. All information on this website is of a general nature only. It might no longer be up to date or correct. You should contact us directly or seek other accredited tax advice when considering whether the information is suitable to your circumstances.

Liability limited by a scheme approved under Professional Standards Legislation.

Last Updated on 25 March 2020