Monthly PAYG instalments could become an option (November 2026)

Would paying your income tax instalments monthly rather than quarterly make cash flow easier to
manage? A government proposal could give more businesses that choice from 1 July 2027.

Most businesses in the PAYG instalment system currently pay quarterly, although payment
frequency depends on individual circumstances. Under the proposed changes, businesses that pay
quarterly or annually would be able to opt in to monthly PAYG instalments.

The government has also proposed allowing the ATO to require monthly instalments where a
taxpayer has a history of failing to comply with their tax obligations.

Importantly, these changes aren’t law yet. Draft legislation has been released for consultation, so
the details may change before anything takes effect.

For businesses, monthly instalments could have both advantages and disadvantages. Smaller, more
frequent tax payments may suit some cash-flow patterns, while other businesses may prefer their
existing payment cycle and the administration that goes with it.

There’s nothing businesses need to change yet. If the proposals become law, we’ll be able to help
you consider whether opting for monthly instalments makes sense for your business.