GST instalments: pay a fixed amount, square up once a year.

Register for GST →5-minute form · usually done in 4 business hours

How the instalment option works.

On the standard quarterly method, every BAS is a small accounting exercise: total your sales, work out the GST collected, tally the credits on your purchases, report the lot. The instalment option replaces all of that with a number the ATO has already calculated. Each quarter you receive an instalment notice showing your GST instalment amount at label G21 (based on your most recent GST history) and your only job is to pay it by the due date. No sales figures, no credit tallies, no quarterly calculation at all.

The reckoning comes once a year. After 30 June you lodge an annual GST return reporting your actual sales, GST and credits for the year. Paid too much across the four instalments? The difference comes back as a refund. Paid too little? You top up the gap when you lodge. Either way, the quarterly admin shrinks to writing four cheques a year, which is exactly why the ATO reserves the option for businesses with a clean lodgment record.

Who can choose it.

• Turnover under the line. You carry on a business with an aggregated turnover of less than $10 million, or you don't carry on a business (some not-for-profits, for instance) and your GST turnover is $2 million or less.
• A track record. You need a current, continuous BAS lodgment record of at least four months before you switch, brand-new registrations can't start on instalments.
• Everything lodged. All previous BAS and GST returns must be in.
• Not in a net refund position. If your GST credits regularly exceed the GST on your sales, the ATO, and arithmetic, say this option isn't for you, because refunds only arrive after the annual return.

The four due dates.

Instalments follow the familiar quarterly calendar, and note the February date, which already includes the extra time everyone gets for the holiday season:

If a due date lands on a weekend or public holiday, the next business day is fine. These are payment dates, not lodgement deadlines (there's nothing to prepare quarterly) but missing one still accrues interest like any late payment, so they belong on the same calendar as everything in our BAS due dates guide.

The annual GST return.

The annual GST return is where your real year gets reported: total sales, GST on sales, GST credits, and the instalments you've already paid. It's due on the same date as your income tax return, or by 28 February following the financial year if you're not required to lodge one. Because it's the only place your actual figures appear, it's also the only place a refund can come from: over-paid instalments sit with the ATO until this return is lodged. Lodging it promptly isn't just compliance. It's how you get your own money back.

Varying the amount: and the 85% rule.

If business drops and the ATO's number now looks too high (or you're growing and it looks dangerously low), you can vary the instalment amount on the instalment notice before the payment is due. The safety rules cut cleanly in two:

• Pay the ATO's unvaried amount and you're always safe. Even if the annual return later shows the instalments covered less than your actual liability, no variation penalty applies. You simply pay the difference at year end.
• Vary downwards at your own risk. If your varied instalments total less than 85% of your actual GST liability for the year, the ATO can charge general interest on the shortfall. Extra amounts paid in later quarters reduce the exposure, so if you vary down and the year recovers, catch up early rather than at the annual return.

Who it suits: and who it doesn't.

It suits steady, established businesses that pay GST most quarters and would rather trade a little year-end reconciliation for four quiet quarters: the consultant with predictable fees, the trades business with a stable book, the cafe whose takings barely move season to season. Cash-flow planning gets easier too, you know every GST payment for the year in advance.

It doesn't suit anyone whose credits can outrun their GST. Exporters and sellers of GST-free supplies, businesses about to buy expensive equipment, and anyone with lumpy import costs can all land in a net refund position, and on instalments, that refund waits for the annual return instead of arriving quarter by quarter. Fast-growing businesses should also think twice: the ATO's amount is based on last year's smaller numbers, which feels pleasant until the annual return presents the real bill in one hit.

One acronym trap.

GST instalments are not PAYG instalments. The similarly named prepayments towards your income tax that can appear on the same activity statement. You can be on either, both or neither, and varying one has nothing to do with the other. If the two are blurring together, our PAYG withholding vs instalments guide untangles the whole family.

How to switch.

Elect by phoning the ATO on 13 28 66. Call by 28 October and the option applies from 1 July of that financial year. Your September-quarter activity statement is replaced by an instalment notice. Once you're on instalments you generally stay for at least the rest of the year, and the annual GST return remains due even if you later cancel your registration or switch back. If you're winding a business up entirely, closing off GST properly matters more than the reporting method, our GST cancellation service checks final BAS obligations as part of the job.

Quick answers.

Related guides: BAS due dates · What is a BAS? · PAYG withholding vs instalments · Cash vs accrual GST · How GST credits work