Instalment Activity Statement (IAS)
- March 15, 2023
- 5 min read
Really simply, an Instalment Activity Statement (IAS) is a document that individuals or business owners use to tell the ATO how much tax they owe.
When people and businesses earn money, they usually have to pay some of it as tax to the government. The IAS helps you to work out how much tax you need to pay and when you need to pay it.
The ATO uses the information on the IAS to keep track of how much tax you owe and to make sure you pay the right amount.
It can be a bit complicated but understanding this document will help you to comply with all your tax obligations.
Let’s get started.
Overview:
- What is IAS?
- What taxes does the IAS include?
- Do you need to lodge an Instalment Activity Statement?
- How do you lodge IAS’s?
- Be sure you are fulfilling your IAS obligations
- How can Sleek help you with your IAS?
What is IAS?
An Instalment Activity Statement (IAS) is a tax reporting document used in Australia by businesses and individuals who pay income tax in instalments. The form reports the amount of tax owed for a particular period and is used to make payments on your income, as well as other taxes such as Goods and Services Tax (GST) or instalments PAYG withholding.
The IAS may be submitted either on a quarterly or monthly basis, depending on your tax obligations. This is determined by the Australian Taxation Office.
The IAS is a little different from Business Activity Statements. The BAS is a more comprehensive tax form that covers a range of taxes, while the IAS is focused primarily on instalments for tax on income instalments and a few other tax types.
What taxes does the IAS include?
The statement includes information about the business’s income and expenses for the reporting period and calculates the amount of tax owed based on this information.
The IAS forms provide a summary of the previous payments made towards the tax liability, and the outstanding balance, if any.
Depending on your obligations and/or business structure, here are some of the taxes that the IAS can include:
Income tax instalments
These are payments made towards your expected tax liability for the current financial year. If you are required to pay tax on your income instalments, the ATO will calculate the amount you need to pay and include it on your IAS.
Goods and Services Tax (GST)
This is a tax on most goods and services in Australia. If you are registered for GST, you will need to report and pay your GST liability on your IAS.
PAYG instalments
These are payments you make to employees, contractors, and other businesses (including ABN withholding). If you are required to withhold PAYG, you will need to report and pay these amounts on your IAS.
Fringe Benefit Tax instalments (FBT)
This is the non-cash benefits provided to employees and their families. If you provide fringe benefits to your employees, you may need to report and pay FBT on your IAS.
It’s important to understand which taxes you need to report and pay on your IAS to avoid any interest charges or penalties from the ATO. If you’re unsure about your obligations or need assistance, you can contact the ATO or seek advice from a registered tax agent.
The IAS is a little different from Business Activity Statements. The Business Activity Statement is a more comprehensive tax form that covers a range of taxes, while the IAS is focused primarily on tax for income instalments and a few other tax types.
Do you need to lodge an Instalment Activity Statement?
In most cases, the ATO will notify you (as an individual or business owner) if you need to pay income and other tax in instalments.
The IAS documents are used by individuals and businesses in Australia who pay tax on their income in instalments.
This can include:
Business owners
Who operate as a sole trader, partnership, company, trust, or superannuation fund, and have a tax obligation based on their income.
Individuals
Who have an income that is not subject to withholding tax, and need to pay a PAYG instalment on their income from investments, rental property, or from a business.
Self-funded retirees
Who have income that is subject to instalment deductions.
Voluntarily registered Entities
That have been registered for GST and have chosen to pay the GST in instalments.
How do you lodge IAS’s?
The ATO will issue you the IAS form required automatically, based on your previous tax liabilities.
You can lodge your new form electronically, you can do so through the Business Portal or the Tax Agent Portal.
If you have not received an IAS form but believe you need to lodge one, you should contact the ATO for assistance.
Be sure you are fulfilling your IAS obligations
If you are required to lodge an Instalment Activity Statement (IAS), there are several obligations you need to fulfil.
These include:
Lodging the IAS on time
You must lodge your IAS on or before the due date to avoid any late lodgement penalties. The date depends on your reporting cycle, which is usually quarterly, but it can be more frequent for some businesses.
Reporting your income and expenses
You need to provide accurate information about your income and expenses for the reporting period. This information is used to calculate the amount of tax you need to pay.
Paying the correct amount of tax
You must pay the correct amount of tax by the due date. The amount of tax payable is calculated based on your income and expenses, and any instalments you have already paid. It’s important to pay the correct amount of tax to avoid any interest charges or penalties.
Reporting and paying other taxes
If you are also registered for other taxes, such as GST or Pay-As-You-Go (PAYG) withholding, or PAYG instalments, you need to report and pay these amounts on your IAS.
Keeping records
You need to keep accurate records of your income, expenses, and tax payments to support your IAS lodgement and for any potential tax audit or review.
How can Sleek help you with your IAS?
Sleek can help simplify your activity statement obligations, so you can focus on running your business. We can tailor our services to help you plan ahead, meet your specific needs and provide ongoing support to help you stay on top of your tax payments.
Get started now! Call our accounting team on +61 2 9100 0480 or use our chatbox to set up an appointment at your convenience.
