How do I negotiate a payment plan with the ATO?

Before you pick up the phone

1. Lodge every outstanding return and BAS. The ATO will not negotiate seriously over a debt it cannot see in full, and unlodged periods are the first thing an officer will raise.
2. Know the exact figures. The balance on each account, how much of it is interest and penalties, and what new obligations fall due in the next 6 months.
3. Work out your capacity honestly. Take your worst month in the last six, subtract living or operating costs and the ordinary tax that falls due, and what remains is your instalment ceiling. The parent guide has a worked gut-check for this.
4. Decide on an upfront amount. Even a modest lump sum changes the tone of the conversation. Plans commonly start with something in the range of 10% to 20% of the debt, but pay what you can rather than what a rule of thumb says.
5. Gather evidence if the debt is large: bank statements, a simple cash flow, a debtor list, and a short explanation of what caused the debt and what has changed.

On the call

Ring 13 11 42 during business hours and expect the officer to work through your capacity to pay. A few things that consistently help:

• Lead with the proposal, not the story. "I owe $84,000, lodgements are up to date, I can pay $8,000 this week and $3,200 a month." Then answer questions.
• Ask for interest remission in the same call. The ATO can remit general interest charge where the delay was outside your control or paying it would cause hardship. Smaller amounts are often decided on the spot.
• If the officer wants more, ask what they would accept. Then decide whether you can hold it. A counter-offer of a slightly higher instalment with a longer term is normal.
• Do not agree to a figure you cannot sustain. A plan that defaults costs you the online channel after two defaults and puts you in a weaker position next time.
• Get it confirmed. Ask for the plan reference, the first debit date, the instalment amount and the term, and check they appear on your ATO online services account afterwards.

If the ATO says no or wants security

The ATO can refuse terms it thinks are unrealistic, and for large debts it may ask for a written proposal or offer a secured plan backed by a mortgage over property or a bank guarantee. A refusal is not the end. Options usually include a revised offer with a larger upfront amount, a shorter term with evidence of how you will fund it, or a formal written submission for debts over $200,000.

If the honest numbers show the debt cannot be paid within 2 years even with everything cut back, a payment plan may not be the right tool. That is the point to look at rescue options such as small business restructuring, or at hardship release for individuals, rather than agreeing to a plan that is hope dressed up as capacity. See what to do when a payment plan is rejected for the detailed playbook.

What to do next

1. Lodge everything outstanding and write down the balance on each ATO account.
2. Calculate your worst-month surplus after ordinary tax, and decide on an upfront amount.
3. Call 13 11 42 with a specific proposal, ask for GIC remission on the same call, and confirm the plan details in writing on your account.

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