ATO Penalty & Interest Calculator Australia 2026-27
Understand the penalties for late lodgement or payment.
Calculate the ATO General Interest Charge (GIC) and failure-to-lodge penalty on overdue tax. See daily accrual, monthly schedule, and total exposure. Uses 2026-27 ATO rates — check ato.gov.au for the current quarter GIC rate.
GIC rate ~11.43% p.a. (2026-27 approx). Check ato.gov.au for current quarter rate. FTL penalty $330/period.
Select the question that matches where you are right now.
Your result shows two separate charges: GIC interest that accrues daily on the unpaid tax debt, and FTL penalties that step up every 28 days you remain unlodged. Both continue to grow until the debt is paid and the return is lodged.
At ~11.43% p.a., GIC is more expensive than most mortgages and credit cards. If you can borrow at a lower rate to pay the ATO, this is often financially sensible. A $50,000 ATO debt costs ~$473/month in GIC alone.
FTL penalties max at $6,600 per outstanding document (20 units). Once you reach the cap, additional delay does not increase this component — only GIC keeps growing. This cap is reached after about 9 months.
This calculator uses an approximate 2026-27 GIC rate. The actual rate changes every quarter. Use Standard mode to enter the current quarter rate from ato.gov.au for a precise calculation.
The total penalty grows quickly. Understanding what drives the cost helps prioritise action.
Every extra day adds ~$3.13 in GIC on a $10,000 debt. At $100,000, it is ~$31/day. The longer you wait, the higher the total. There is no benefit to delaying payment once you know the debt exists.
If you have multiple outstanding returns (e.g. BAS statements, income tax returns), each attracts its own FTL penalty independently. Three outstanding returns at 90 days = $990 × 3 = $2,970 in FTL alone.
Lodging stops FTL penalties immediately — even if you cannot pay the tax. The GIC on the unpaid amount continues, but you stop the FTL clock. A nil return or an estimated return is always better than no return. If you are unsure of the figures, lodge an estimate and amend later.
Several actions can immediately reduce your total exposure or prevent it from growing further.
If you have any outstanding lodgements, lodge them today. This stops the FTL clock immediately. Every 28-day period adds another $330 per document — lodge now and save.
Partial payments reduce the balance on which GIC accrues. Paying $5,000 on a $10,000 debt immediately halves the daily GIC. Even small payments help. Consider borrowing at a lower rate to clear the debt.
If you have a genuine reason (illness, disaster, hardship), apply for remission. First-time offenders with good compliance history often receive partial remission. Call the ATO on 13 28 65 or ask your tax agent to apply on your behalf.
Once you know your exposure, these are the priority actions.
Call 13 28 65 (individuals) or 13 11 42 (businesses). Proactive contact is viewed very favourably — the ATO is far more accommodating with taxpayers who engage than those who ignore correspondence.
Individuals can set up payment plans online via myGov (debts under $100,000). For larger amounts or businesses, call the ATO. Payment plans prevent enforcement action while you pay off the debt.
A registered tax agent can negotiate on your behalf, manage remission applications, and set up instalment arrangements. For significant debts ($10,000+), professional representation often more than pays for itself.
GIC interest formula and failure-to-lodge penalty rates for 2026-27
General Interest Charge (GIC)
The GIC applies daily to unpaid tax debts. The rate is set quarterly as the 90-day bank bill rate plus 7 percentage points. For 2026-27, the rate is 11.43% per annum for the September 2026 quarter. This is significantly higher than most mortgage rates — paying tax debt quickly is almost always the financially optimal choice.
Formula: GIC = Tax owed × (GIC rate ÷ 365) × Days overdue
| Tax overdue | Daily GIC (at 11.43%) | 30-day GIC | 90-day GIC |
|---|---|---|---|
| $5,000 | $1.57 | $47 | $141 |
| $10,000 | $3.13 | $94 | $282 |
| $25,000 | $7.83 | $235 | $705 |
| $50,000 | $15.66 | $470 | $1,409 |
| $100,000 | $31.32 | $939 | $2,818 |
Failure to Lodge (FTL) penalty
The FTL penalty is $330 per 28-day period (one penalty unit) the obligation remains outstanding, up to a maximum of 20 penalty units ($6,600). It applies per document — so if you have multiple outstanding lodgements, each attracts its own FTL penalty. Medium entities pay 2 units per period; large entities pay 5.
When GIC applies and when the lower SIC rate applies instead
General Interest Charge (GIC) — ~11.43% p.a.
GIC applies to tax debts that are overdue for payment. This includes: unpaid tax assessments after the due date, PAYG instalments not paid on time, GST not remitted by the due date, and FBT debts. GIC accrues daily until the full debt is paid. GIC paid by individuals is not deductible; GIC on business income tax may be deductible.
Shortfall Interest Charge (SIC) — ~7.43% p.a.
SIC applies to tax shortfalls on self-assessed returns — when you lodged a return on time but paid too little. SIC only applies for the period between the original due date and the date of ATO amended assessment. SIC is lower than GIC (4 percentage points lower) and is always deductible.
| Charge | Rate (2026-27) | When it applies | Deductible? |
|---|---|---|---|
| GIC | ~11.43% p.a. | Overdue unpaid tax | Business: yes; Individual: no |
| SIC | ~7.43% p.a. | Amended assessment shortfall | Always deductible |
When the ATO will reduce or waive GIC and FTL penalties
Grounds for remission
The ATO has discretion to remit (reduce or waive) GIC and FTL penalties on application. Common grounds include: natural disaster affecting your ability to pay or lodge; serious illness of yourself or a close family member; ATO error or delay that caused or contributed to the shortfall; genuine financial hardship where paying the full penalty would leave you unable to meet basic living expenses.
How to apply
You can request remission by: calling the ATO on 13 28 65 and explaining your circumstances; lodging a written request through your tax agent; or using the ATO Online Services portal via myGov. Have documentation of the circumstances ready.
Likelihood of success
First-time offenders with a good compliance history and genuine reasons typically have a moderate chance of partial or full remission, particularly for FTL penalties. GIC remission is harder — the ATO generally expects the underlying tax debt to be paid or in an approved payment arrangement before considering interest remission.
Lodge even if you cannot pay
Lodging your return on time stops FTL penalties from accruing, even if you cannot pay the tax debt. The GIC will continue on the unpaid amount, but the FTL penalty is capped at lodgement date. This is important: lodging a nil or estimated return is better than not lodging at all.
How instalment arrangements affect GIC accrual
Payment plans do not stop GIC
Entering into an ATO payment plan (formally: an "instalment arrangement") does not stop GIC from accruing on the outstanding balance. GIC continues to accrue daily on the unpaid portion. The rate is the same GIC rate throughout the arrangement.
But there are benefits
Payment plans prevent enforcement action (garnishee notices, director penalty notices), protect your credit rating from ATO judgments, and demonstrate good faith — which can help when applying for remission. The ATO will generally approve reasonable instalment requests if you have a genuine ability to pay over the proposed period.
Small Business Tax Pause interest
In some circumstances (e.g. COVID-era provisions or specific ATO programs), the ATO may suspend GIC temporarily. Check with the ATO or a tax agent for any current programs.
How to set up a payment plan
Individuals can set up a payment plan online via myGov (up to $100,000). Businesses and larger amounts require a call to the ATO on 13 11 42. Your tax agent can also negotiate on your behalf and may achieve better terms.
❓ Frequently asked Frequently asked questions
What is the ATO GIC rate for 2026-27?
The General Interest Charge rate for 2026-27 is 11.43% per annum for the September 2026 quarter (set quarterly). The rate is the 90-day bank bill rate plus 7 percentage points. Check the ATO website (ato.gov.au) for the current quarter rate, as this calculator uses an approximate figure.
What is the failure to lodge penalty in 2026-27?
For individuals and small businesses, the failure to lodge penalty is $330 per 28-day period the obligation is outstanding, up to a maximum of $6,600 (20 penalty units). Each outstanding document attracts its own penalty. Medium entities pay $660 per period; large entities pay $1,650 per period.
Can the ATO take legal action for unpaid tax?
Yes. The ATO has significant enforcement powers including: garnishee notices (directing employers or banks to pay funds to the ATO), director penalty notices (making directors personally liable for company tax debts), disclosure to credit agencies, and civil litigation to obtain judgment debts. The ATO typically pursues enforcement after contact and payment arrangement attempts have failed.
Is ATO interest (GIC) tax deductible?
For individuals: no, GIC is not deductible as it relates to private tax obligations. For businesses: GIC on income tax may be deductible as a business expense. SIC (Shortfall Interest Charge) is always deductible. Check with your tax agent for your specific situation.
Where these figures come from
Every threshold and tax rate on this page is taken from the Australian Taxation Office (ATO) — the source of record for Australian income tax, Medicare levy, HECS/HELP repayment, and capital gains tax.
- Individual income tax rates (2026–27, Stage 3) — ATO — Individual income tax rates.
- Medicare levy & surcharge — ATO — Medicare levy.
- HECS/HELP repayment thresholds — ATO — Study and training support loans.
- Capital gains tax rules — ATO — Capital gains tax.
- GST rules — ATO — GST.
- Tax offsets & LITO/LMITO — ATO — Tax offsets.
Last checked: July 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.