What is the best way to pay a large tax bill?
Short answer
If you can pay in full, do it by BPAY, card or bank transfer before the due date; that is the cheapest way. If you cannot, an ATO payment plan is usually the next best option, followed by a well-priced loan, with credit cards and expensive short-term finance last. The right choice depends on cost, whether the debt is secured, and whether you can keep up the repayments.
If you can pay in full
The ATO's payment methods are BPAY (biller code 75556), ATO online services by card, Government EasyPay, direct debit, bank transfer to the ATO's account, Australia Post and cheque. Every method needs your payment reference number, which differs between your income tax and activity statement accounts. BPAY and bank transfers can take up to 4 business days to arrive, and mail longer, so pay a few days early; interest runs from the due date, not from when you pressed send.
Card payments carry a fee of 0.94% to 1.45% for domestic credit cards and none for debit cards. Paying the ATO by credit card has the full table. If paying in full would leave you unable to pay wages or rent, do not do it; that is what the options below are for.
If you cannot pay in full: the options in rough cost order
| Option | Typical cost | Watch for |
|---|---|---|
| ATO payment plan | GIC at 11.43%, no fees, may be partly remitted | Interest keeps accruing; two defaults in 12 months closes the online channel |
| Refinance or home loan top-up | Home loan rate plus fees | Turns unsecured debt into debt on your home |
| Business or personal loan | Varies widely; unsecured business finance can exceed GIC | Fees, director guarantees, fixed repayments |
| Credit card carried over | Card rate, commonly well above GIC | Card fee, non-deductible interest |
The plan is the usual starting point because it is unsecured, can be set up online for debts up to $200,000, and can be paired with a GIC remission request. A loan wins when its all-in cost is clearly lower and you can carry the repayment; loan vs payment plan compares them. The borrowing guide covers what lenders typically look at. This site does not arrange finance.
Tax bill too big to pay at once?
There are cheaper ways to spread it than a card or a quick loan. Free and confidential.
What tends to make a large bill worse
- Paying nothing while you decide. Part payment by the due date reduces the base that GIC compounds on and shows engagement.
- Not lodging because you cannot pay. Lodgement and payment are separate; late lodgement adds penalties on top of interest.
- Using super without checking the rules. Early release for tax debt is narrow; this page explains.
- Ignoring letters. Once the ATO moves to a garnishee or a director penalty notice, the options narrow quickly.
If the bill is far beyond anything you could repay over a few years, the answer may not be a payment method at all but a negotiation. Can't pay your tax bill walks through those paths.
What to do next
- Work out honestly whether you can pay in full without missing wages, rent or super; if yes, pay by BPAY or card a few days before the due date.
- If not, set up an ATO payment plan online or by phone and ask about GIC remission at the same time.
- Only then price a loan or refinance against the plan, with your accountant, before committing to borrowing.
Related questions
How long does an ATO payment take to process?
BPAY and bank transfers can take up to 4 business days from the day you pay to appear on your ATO account, and cheques and mail longer. Card payments through ATO online services or Government EasyPay generally process faster. Interest is calculated from the due date regardless of processing time, so allow a margin.
Can I pay part of my tax bill and set up a plan for the rest?
Yes. Paying what you can by the due date and putting the balance on a payment plan is common and the ATO accepts it. The part payment reduces the amount that interest compounds on and shows the ATO you are engaging, which tends to help both the plan and any later remission request.
Tax bill too big to pay at once?
There are cheaper ways to spread it than a card or a quick loan. Free and confidential.
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