Tax & ATO
Instalment Activity Statement
An Instalment Activity Statement (IAS) is the simpler ATO activity statement used to report and pay PAYG withholding, PAYG instalments and FBT instalments in the months when a full BAS is not due, or by businesses and investors that are not registered for GST at all.
The ATO issues activity statements in two flavours. The Business Activity Statement (BAS) covers GST plus everything else; the Instalment Activity Statement covers everything except GST. You lodge an IAS in two common situations. First, if you are not registered for GST (turnover under $75,000, or an investor with PAYG instalment obligations), the IAS is how you pay PAYG instalments toward your income tax. Second, if you are GST-registered and lodge a quarterly BAS but the ATO has classified you as a medium withholder (more than $25,000 of PAYG withholding a year), you must remit the tax withheld from wages monthly: the IAS covers months one and two of each quarter, and the quarterly BAS picks up month three along with GST.
Most IAS obligations are due on the 21st of the following month for monthly withholders, or 28 days after quarter end for quarterly PAYG instalments (28 October, 28 February, 28 April and 28 July). The ATO pre-fills instalment amounts; you can vary them down if income has fallen, but a variation that undershoots your actual liability by more than 15% can attract general interest charge. See the ATO guide to activity statements for lodgement channels.
The IAS is where two of the most common small-business cash-flow surprises live. PAYG instalments often start arriving after your first profitable tax return: the ATO enters you into the instalment system automatically once business or investment income passes its thresholds, and the first quarterly instalment can land when the cash from that profitable year is long spent. Budgeting roughly a quarter of expected tax each quarter avoids the shock.
The second trap is the monthly withholding cycle. A growing business that crosses $25,000 of annual PAYG withholding is shifted from quarterly to monthly remittance, and the two extra IAS lodgements per quarter are easy to miss because nothing about your GST cycle changes. Missed activity statements attract failure-to-lodge penalties (one penalty unit per 28 days late for small entities, capped at five units) even when no tax is owing. If payroll software reports each pay run through Single Touch Payroll, the withholding figures for the IAS are already sitting in your payroll records, so the statement takes minutes; estimate the withholding itself with the OneBookPlus PAYG withholding calculator.
| Feature | IAS | BAS |
|---|---|---|
| GST reported | No | Yes |
| PAYG withholding | Yes (monthly for medium withholders) | Yes (quarterly for small withholders) |
| PAYG instalments | Yes (non-GST-registered entities) | Yes (GST-registered entities) |
| Typical due date | 21st of the following month | 28 days after quarter end |
| Who lodges | Non-GST-registered businesses and investors; GST-registered employers withholding monthly | All GST-registered businesses |
A business can lodge both in the same quarter: an IAS in each of the first two months for wages withholding, then a quarterly BAS that reports GST plus the third month of withholding. Lodging through a registered tax or BAS agent generally extends BAS due dates, but the 21st-of-month IAS deadline for monthly withholders does not move.
The definitions above only get you so far; the free OneBookPlus PAYG withholding calculator turns them into your own figures in seconds, no sign-up needed.
Only if the ATO has entered you into the PAYG instalment system, which happens automatically once your business or investment income in your last tax return passes the ATO's entry thresholds. If you are GST-registered you will report the instalment on your BAS instead; if not, the ATO sends an IAS (usually quarterly) to pre-pay your income tax.
Yes. If your income has dropped you can vary the instalment down when you lodge. Be careful: if your varied instalments end up more than 15% below your actual tax liability for the year, the ATO can charge general interest on the shortfall. Vary with a realistic full-year estimate, not just the current quarter.
The ATO applies a failure-to-lodge penalty of one penalty unit for each 28-day period the statement is overdue (up to five units for small entities), plus general interest charge on any unpaid amount. Penalties apply even for nil statements, so lodge on time even when there is nothing to pay.
Last reviewed and updated: by Bishal Shrestha