Can I get an interest free ATO payment plan?
Short answer
Only in one specific case. A small business with turnover under $2 million can get an interest free plan for overdue activity statement amounts of $50,000 or less, paid by direct debit within 12 months. Every other ATO payment plan attracts general interest charge at 11.43%, although you can ask for it to be remitted.
Who qualifies for the interest free activity statement plan
The ATO runs one standing concession for small business activity statement debt. Technically the interest still accrues, but the ATO remits it automatically as it appears on the account for as long as you keep the plan. To qualify you need all of the following:
- Annual turnover of less than $2 million.
- Recent activity statement amounts (GST, PAYG withholding, PAYG instalments) of $50,000 or less.
- The amounts have been overdue for no more than 12 months.
- No more than one payment plan default in the last 12 months.
- No outstanding activity statement lodgements.
- You cannot get finance through normal business channels, such as a bank loan.
- You can show the business is viable and able to pay by direct debit within 12 months.
It only covers BAS debt. Income tax, super guarantee charge and older activity statement amounts are not included.
How to apply
You cannot select this option online. Call the ATO business enquiries line on 13 28 66 during business hours and ask specifically for an interest free payment plan for overdue activity statement amounts. If you already have a normal plan on that debt, you can ask for it to be converted.
Be ready to explain why finance is not available and why the business will be able to keep up. The conditions of the plan are strict: all other lodgements and payments must be met on time, and every instalment must be paid by direct debit. If the plan defaults, the automatic remission stops and the interest you had saved can come back onto the account.
Want to cut the interest on your debt?
A specialist can check your eligibility and put the remission request together.
What everyone else can do about interest
If you do not fit the small business criteria, interest keeps accruing inside your plan at 11.43% a year, compounding daily, and since 1 July 2025 it is no longer tax deductible. Two things reduce the cost:
- A shorter plan. Every month you shave off the term is a month less interest on the balance.
- A remission request. The ATO will remit GIC where the delay was caused by circumstances outside your control, or where paying the interest would leave you unable to meet your obligations. Small amounts are often decided on the phone; larger ones need a written request. See GIC remission for how to word it.
A remission is not automatic and is not guaranteed. Ask for it when you set up the plan, and again once you have paid the plan out, when the ATO can see you kept your side of the deal.
What to do next
- Check the seven eligibility points above against your business and your activity statement account.
- If you qualify, call 13 28 66 and ask for an interest free payment plan for overdue activity statement amounts.
- If you do not qualify, set up the shortest plan you can afford and lodge a GIC remission request alongside it.
Related questions
Is the interest free plan available for income tax debt?
No. The concession is limited to activity statement amounts for small businesses. Income tax debt attracts general interest charge inside a payment plan in the normal way, although you can still apply for remission on the usual grounds.
What happens to the remitted interest if I default on the interest free plan?
The automatic remission stops. The ATO can reverse the interest it had remitted and charge GIC on the remaining balance from that point. You would also count as having one default in the last 12 months, which affects eligibility for another interest free plan.
Want to cut the interest on your debt?
A specialist can check your eligibility and put the remission request together.
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