PAYG variations

PAYG variations are attractive to taxpayers who have negatively geared investments (such as rental properties or share portfolios), and receive large tax refunds when lodging their annual tax returns. This strategy involves lodging a PAYG variation with the ATO in July of each financial year to bring forward the tax benefit. Once the PAYG variation is processed by the ATO the taxpayer’s employer will reduce the PAYG withholding tax deducted from their weekly wage. This brought forward cashflow can then be banked into a mortgage offset account to reduce private non-deductible interest (on their private residence).