Owe the ATO? How payment plans work

If you can't pay a tax bill, BAS or other ATO debt by the due date, you're not alone. The worst thing you can do is ignore it. The ATO is generally willing to work with people who get in touch early.

Step 1: lodge on time anyway

Always lodge your BAS and tax returns on time, even if you can't pay. Lodging late adds failure to lodge penalties on top of your debt.

Step 2: set up a payment plan

• Many individuals and small businesses can set up a payment plan themselves online through the ATO, for debts up to a certain amount.
• You choose weekly, fortnightly or monthly payments you can afford.
• For larger debts, or if you've defaulted before, the ATO may ask for more information about your finances.
• A registered tax agent can set up and negotiate a plan for you.

Interest still applies

The ATO charges general interest on unpaid amounts, including while you're on a payment plan. Paying as much as you can, as early as you can, keeps the cost down. From 1 July 2025, this interest is no longer tax deductible.

Keep up with new bills

To stay on a payment plan, you usually need to keep lodging and paying new amounts on time. Setting aside GST and PAYG withholding each week helps you avoid adding to the debt.

If the debt is overwhelming

If you can't see a way to pay, speak to us early. Depending on your situation, there may be options such as asking for penalties to be remitted, or reviewing whether your business structure and pricing are working for you. Company directors should get advice quickly, because directors can become personally liable for some unpaid company tax and super.

Send us a request and we'll review your ATO account and help you set up a plan.

This article is general information only and does not take your personal circumstances into account. It is not financial or tax advice. Tax rules change, so please contact us before acting on it. Information current as at the date above.