Compliance
GST & PAYG Instalment Changes for Businesses: Managing the New GDP Adjustment
A 5% GDP uplift factor from 1 July 2026 will affect quarterly GST and PAYG instalment payments – budgeting and software updates are essential.
By NomadicTax Research Team • 5-8 min read • August 11, 2026
## What Is the GDP Adjustment Factor Change?
From **1 July 2026**, the Australian Taxation Office increases the **GDP adjustment factor** used to calculate quarterly **GST** and **PAYG instalments** from 4% to **5%** for most taxpayers. This adjustment essentially increases estimated instalment amounts for businesses with non-standard accounting periods. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/GDPupliftfactor?utm_source=openai))
## Who Is Affected?
- Businesses using PAYG instalments with substituted accounting periods (SAP). Those whose income years **commenced 1 January, February or March 2026** will still use 4% for those specific SAPs, but all others for the 2026-27 year move to 5% factor. ([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/GDPupliftfactor?utm_source=openai))
- Businesses with standard accounting periods shifting to the new fiscal year may see higher instalments for GST and PAYG. |
## Practical Considerations & Tips
- **Cash flow planning**: Prepare for potentially higher instalments owing to increased rate. Review your GST liability and income forecasts earlier.
- **Software update**: Check whether your accounting or tax software supports the new factor automatically. If not, manual overrides or adjustments may be needed.
- **Review SAP settings**: Confirm whether your business qualifies for the substituted accounting period rules and ensure correct factor is applied in those cases.
## Example
- Company A has standard accounting period starting 1 July. For 2026-27, instalments will include the 5% GDP uplift. A previous estimate of $20,000 per quarter might become $21,000 depending on turnover and tax base, reflecting a modest rise.
- Company B started its accounting year 1 March 2026 under SAP. It continues using 4% factor for that year due to the transitional rule. Next year, it shifts to 5%.([softwaredevelopers.ato.gov.au](https://softwaredevelopers.ato.gov.au/GDPupliftfactor?utm_source=openai))
## Actions Before 30 June 2026
- Forecast your taxable income, GST obligations to estimate instalments under new factor.
- Adjust your budgeting to accommodate possible increases.
- Engage your accountant to plan instalment schedule semi annually or quarterly under new rules.
**Wrap-up**: This change may seem modest in percentage terms, but across a year its effect compounds. Understanding how and when these rates apply will help your business manage cash flow and avoid surprises.