Can I pay an ATO payment plan out early?

How to pay a plan out early

1. Get the payout figure. Log in to ATO online services and check the current balance on the relevant account. It will include GIC up to today, which is usually a little more than the sum of your remaining instalments.
2. Pay it using your payment reference number (PRN). Any standard ATO payment method works: BPAY, card, or bank transfer to the ATO's account. Allow a business day or two for the payment to clear.
3. Cancel the plan. Once the balance shows as zero, cancel the payment plan in online services (or ask your agent to). This stops the direct debit. If you skip this step the next instalment may still be drawn and you will have to wait for a refund.
4. Check for a small residual. A few dollars of GIC can post after your payment. Clear it so the account is clean.

Cancelling a plan you have paid out does not count as a default. It is a cancelled plan on a zero balance, which the ATO does not treat as a broken promise.

Making extra payments without paying it all out

You do not have to clear the whole debt to benefit. Any additional payment reduces the balance the daily interest is calculated on. Two things to know:

• An extra payment does not replace your next instalment. The scheduled direct debit still runs. If you want lower instalments after a lump sum, vary the plan. See can I change my plan?
• A tax refund or credit that lands while you are on a plan is offset against the debt automatically. It reduces the balance, but the ATO does not treat it as an instalment either. See will my refund be taken on a plan?

Is paying out early the right move?

Usually yes, if the money is genuinely spare. GIC is 11.43% per year and no longer deductible, so clearing it is one of the better returns available. A few checks first:

• Do not starve the next BAS. Paying out the old debt and then missing new tax puts you back where you started. Keep enough aside for upcoming obligations.
• If you are borrowing to pay out, compare the loan's real cost with the plan. Some tax debt loans cost more than GIC once fees are counted. See tax debt loan vs ATO payment plan.
• Ask about interest remission before you pay. If you have a genuine reason for the original delay, a GIC remission request is easier to argue while the interest is still on the account. Once paid, it can still be requested, but the refund path is slower.

What to do next

1. Check your current account balance in ATO online services, including interest to date.
2. Pay the full amount using your payment reference number, then confirm it has cleared.
3. Cancel the payment plan in online services so the direct debit stops.
4. Consider a GIC remission request if the delay had a genuine cause.

More questions: 26 ATO payment plans questions answered · Full guide: ATO payment plans