ATO interest and penalties: your questions answered
In plain English
The ATO charges interest daily and penalties by the unit, and since 1 July 2025 none of that interest is deductible. What the numbers are right now, when they start, and how remission really works.
Want the full guide?
These are short, direct answers. The complete picture is in GIC remission.
What is the ATO general interest charge rate right now?
The ATO general interest charge (GIC) rate is 11.43% a year for 1 July to 30 September 2026 , compounding daily.
Answer →When does the ATO start charging interest?
The ATO starts charging general interest charge from the day after the payment due date , and it runs every day until...
Answer →Is ATO interest still tax deductible?
No. General interest charge (GIC) and shortfall interest charge (SIC) incurred on or after 1 July 2025 cannot be...
Answer →How do I get ATO interest waived?
You get ATO interest waived by asking for remission of the general interest charge .
Answer →What is the shortfall interest charge (SIC)?
The shortfall interest charge (SIC) is interest the ATO charges when your income tax assessment is amended and you owe...
Answer →How much is the ATO late lodgement penalty?
For an individual or small business, the ATO failure to lodge (FTL) penalty is $364 for every 28 days, or part of 28...
Answer →Can a failure to lodge penalty be waived?
Yes. The ATO can remit a failure to lodge (FTL) penalty in full or in part, and it does so regularly where the delay...
Answer →What is the penalty for lodging a BAS late?
A late BAS attracts the failure to lodge penalty: $364 for every 28 days, or part of 28 days, it is late, capped at...
Answer →Interest and penalties growing faster than you can pay?
GIC and penalties are remitted more often than people think. A specialist can tell you whether yours qualify.
What is an ATO penalty unit worth in 2026?
A Commonwealth penalty unit is $364 for penalties arising on or after 1 July 2026 , up from $330.
Answer →What reasons does the ATO accept for penalty remission?
The ATO accepts reasons that show the failure was caused by something outside your control and that you acted...
Answer →Can I pay the original tax and not the interest?
Yes. You can pay the primary tax and leave the general interest charge on your account.
Answer →Is the fee for paying the ATO by card deductible?
It depends on who is paying and what for. The ATO says the card payment fee "may be deductible depending on your...
Answer →What happens if I don't pay PAYG instalments?
An unpaid PAYG instalment becomes an ordinary tax debt, with general interest charge from the day after the due date .
Answer →Can I vary PAYG instalments I can't afford?
Yes, but only if your expected tax for the year is actually lower.
Answer →Do I get a late lodgement penalty if I am owed a refund?
Usually not. The ATO's published practice is that it generally does not apply the failure to lodge penalty to a late...
Answer →