ATO payment plans: your questions answered
In plain English
Payment plans are where most ATO debt actually gets resolved, and where most of the confusion lives: interest, how long you get, what happens when one falls over. Straight answers to the questions people ask before, during and after a plan.
Want the full guide?
These are short, direct answers. The complete picture is in ATO payment plans.
Does an ATO payment plan charge interest?
Yes. An ATO payment plan does not stop interest. The general interest charge (GIC) keeps accruing on the unpaid balance...
Answer →How long can an ATO payment plan be?
Up to 2 years online. If you owe $200,000 or less you can set up a plan yourself in ATO online services with a term of...
Answer →Can I have two ATO payment plans at once?
Yes, for separate accounts. The ATO sets up payment plans per account, so you can have one plan on your income tax...
Answer →Can I pay an ATO payment plan out early?
Yes, at any time and with no penalty. The ATO allows extra payments on top of your instalments and lets you pay out the...
Answer →What happens if I miss a payment on my ATO payment plan?
One missed instalment does not always kill the plan, but it starts a short clock.
Answer →Why has my ATO payment plan defaulted?
Your plan defaulted because one of its conditions was broken.
Answer →What happens after two payment plan defaults in 12 months?
The online channel closes. Once you have defaulted on or cancelled two or more payment plans in the past 12 months, the...
Answer →Can I change or extend my ATO payment plan?
Yes, and changing a plan is far better than missing a payment on it.
Answer →Need a payment plan the ATO will actually accept?
A specialist can tell you what to propose and what gets knocked back. Free, confidential call.
How do I cancel an ATO payment plan?
You cancel a plan in ATO online services, through your tax agent, or by phoning the ATO.
Answer →Do I have to pay something upfront for an ATO payment plan?
Usually, yes. When you set up a plan in ATO online services, the system gives you an upfront amount and suggested...
Answer →How much should I offer the ATO per month?
Offer the figure that clears the debt, plus interest, in the shortest term you can genuinely hold after your ongoing...
Answer →Can I set up a payment plan online if I owe more than $100,000?
Yes. The ATO's online limit is $200,000 for individuals and businesses, so a debt of $100,000 to $200,000 can be set up...
Answer →Can the ATO refuse a payment plan?
Yes. A payment plan is not a right. The ATO's own wording is that you may not be eligible on the terms you suggest, or...
Answer →Will the ATO give me a payment plan if I have unlodged returns or BAS?
Usually not, and if it does, the plan is unlikely to hold. The ATO cannot agree to instalments on a debt it does not...
Answer →Does an ATO payment plan affect my credit score?
No. An ATO payment plan is not reported to credit bureaus and does not appear on your credit file.
Answer →Can I get an interest free ATO payment plan?
Only in one specific case. A small business with turnover under $2 million can get an interest free plan for overdue...
Answer →Which number do I call to set up an ATO payment plan, and what do I say?
Call 13 11 42, the ATO's lodge and pay enquiry line, 8:00 am to 6:00 pm Monday to Friday.
Answer →How does the ATO payment plan estimator work, and what does it hide?
The estimator takes your debt, an upfront amount and an instalment, then shows how long the plan runs and roughly how...
Answer →What does the ATO mean by capacity to pay?
Capacity to pay is the ATO's assessment of whether you can realistically pay the proposed instalments and keep up with...
Answer →My ATO direct debit failed. What happens now?
Your plan is now in arrears, and it will default if you do not catch up.
Answer →Can one ATO payment plan cover income tax, BAS and super?
No. Each ATO account needs its own payment plan. Income tax sits on one account, GST, PAYG withholding and PAYG...
Answer →Will my tax refund be taken while I am on a payment plan?
Yes. Any refund or credit you become entitled to is offset against the debt, even while your plan is running.
Answer →Can my accountant set up an ATO payment plan for me?
Yes, as long as they are a registered tax agent or BAS agent and you are on their client list.
Answer →How do I negotiate a payment plan with the ATO?
Lodge everything, work out what you can pay in a bad month, offer an upfront amount, and call 13 11 42 with a specific...
Answer →Can I get a payment plan for BAS or GST debt?
Yes. BAS debt, including GST, PAYG withholding and PAYG instalments, can go on an ATO payment plan like any other tax...
Answer →Is GIC still charged while I am on a payment plan?
Yes. General interest charge keeps accruing inside a payment plan at 11.43% a year, compounding daily, unless the ATO...
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