Can you choose to pay all your Tax at once?

[Pilchard_Adams]

Someone at work says that you can opt to not pay any tax throughout the financial year, and just receive a bill once you do your tax return. I dont think this is true otherwise everyone would have their 15-20k tax sitting in an offset account working for them each year. Just want confirmation that this bloke is full of s**t???

 

[Lyyynnnchy]

Someone at work says that you can opt to not pay any tax throughout the financial year, and just receive a bill once you do your tax return. I dont think this is true otherwise everyone would have their 15-20k tax sitting in an offset account working for them each year. Just want confirmation that this bloke is full of s**t???

You can indeed do this. How do you think people with their own business pay tax? They pay it in a lump sum at the end of the year. I guess people prefer to pay it in small amounts weekly/fortnightly/monthly rather than have a massive $20,000 bill rock up at the end of the financial year.

When you start a new job you simply tick the "no tax" option on the tax dec (?) form.

 

[Mint Condition]

I don't think you can.

Once you start earning above a certain amount ($2k for individuals) from business or investment income you get a letter from the ATO advising that you must now pay PAYG tax instalments (so long as your tax bill is over $500 in total...obviously if you were just running your own business and had an income from it of only a few thousand dollars you wouldn't pay any tax). You get a bill every quarter. You can change it to an annual lump sum payment but only if you earn less than $8k and meet some other criteria.

http://www.ato.gov.au/individuals/content.aspx?doc=/content/14896.htm
http://www.ato.gov.au/businesses/content.aspx?doc=/content/44903.htm

Given this I really doubt you can opt to pay your tax in one lump sum as an employee. It'd cause too much trouble with people not keeping enough money saved to cover their tax bill.

 

[Visions]

You can indeed do this. How do you think people with their own business pay tax? They pay it in a lump sum at the end of the year. I guess people prefer to pay it in small amounts weekly/fortnightly/monthly rather than have a massive $20,000 bill rock up at the end of the financial year.

When you start a new job you simply tick the "no tax" option on the tax dec (?) form.

Are you sure you're not confusing this with the tax free threshold option for a second job?

I thought employers legally had to withhold amounts under the PAYG system for employers otherwise penalties apply. So on a salary I cannot see any way you are able to defer tax.

Though sole traders are a different story. Depending on their taxable incomes they may not need to pay anything until their yearly tax return.

 

[Pilchard_Adams]

I am a sole trader and keep all my tax in an account for the financial year. But I am also employed full time, was hoping I could do the same. I suppose it is something that could save a fair amount per year so if it was possible a lot of people would be doing it.

 

[00Stinger]

You can indeed do this. How do you think people with their own business pay tax? They pay it in a lump sum at the end of the year. I guess people prefer to pay it in small amounts weekly/fortnightly/monthly rather than have a massive $20,000 bill rock up at the end of the financial year.

When you start a new job you simply tick the "no tax" option on the tax dec (?) form.

No. The tax free option refers to the tax free threshold, not no tax payment.

Businesses usually pay there tax quarterly.

 

[kickazz]

As a general rule, no you can't, because the ATO don't trust people to put that money aside so they can pay their tax bill, hence PAYG. Fair enough when you think aout it.

 

[bullish23]

This is actually the system in Switzerland. The employer does not withold PAYG. Taxpayers pay one lump sum at year end once they file their return. However in true Swiss style they don't allow foreign nationals the same privilege and therefore my employer is required to withold tax on my monthly salary.