What is a Quarterly Return?

A quarterly return is a term used to describe revenue that is generated within a specific three-month time frame. In actual practice, the term may describe the amount earned from some type of investment during that period, the amount of sales revenue generated by a business, or even the total benefits extended to employees during a given quarter of the calendar year. Accurately calculating and tracking the return is often important when it comes to declaring taxes for the time frame, as well as comparing the business volume generated to that of previous quarters.

In terms of investments, the quarterly return looks closely at the rate of return that an acquired asset provided to the owner during the quarter. Ideally, each asset within an investment portfolio will generate some small amount of return during the period, resulting in a decent three-month increase over the previous quarter. Investors often diversify portfolios with a combination of securities with lower and higher volatility rates. This provides the opportunity to earn a greater return if the investments with a higher risk level actually do perform as anticipated. At the same time, the investments that carry a lower degree of risk generate returns that help to offset any losses sustained from the activity of the higher risk holdings, allowing the overall quarterly return to still show some amount of increase.

For businesses, a quarterly return often refers to documents that must be filed with governmental tax agency, detailing the amount of revenue generated. In some countries, this type of return also requires that information regarding the number of individuals employed with the firm, as well as the amount of wages and salaries paid and the taxes withheld on behalf of the employees, also be reported. Depending on the tax requirements that exist in the area where the company operates, the quarterly return may also require that the employer differentiate between actual hours worked, and income provided to employees in the form of vacation pay, sick pay, or pay for personal days taken during the three-month period.

Along with identifying income, withholding, and disbursements to employees, a business quarterly return will also reflect the amount of taxes that the business is remitting to the tax agency. This not only includes the withholding that is done for employees, but also the assessment of taxes on the business itself. In many countries, failure to provide a quarterly tax return and make the indicated payment can lead to the imposition of a severe penalty. For this reason, most businesses keep highly detailed records that can be used to prepare the return, and also set aside funds to cover all taxes due for the quarter.