What happens if I miss a payment on my ATO payment plan?
Short answer
One missed instalment does not always kill the plan, but it starts a short clock. The ATO's process is that the plan may stay active and move into arrears. You get an arrears letter stating the minimum you must pay now. Ignore it, or miss again, and the plan defaults, the whole balance becomes payable and enforcement can resume. Background is in our ATO payment plan guide.
Arrears versus default
These are different stages and it matters which one you are in.
| Arrears | Default | |
|---|---|---|
| Plan status | Still active | No longer active |
| What the ATO sends | Arrears letter with a minimum catch up amount and any other action required | Default notice; full overdue balance is immediately payable |
| What fixes it | Paying the stated amount by the stated date and meeting any other condition | A new plan, negotiated from a weaker position |
| Counts toward two in 12 months | No | Yes |
The ATO does not publish a fixed number of days between arrears and default, and the letter itself sets the timeframe. Treat it as short. In practice a plan that is left in arrears defaults, and the ATO can also default a plan for a missed instalment without an arrears stage where there is other non compliance, such as an unlodged BAS.
What to do in the first 48 hours
- Find out why it bounced. Most missed instalments are failed direct debits: not enough funds on the morning, a changed card, a closed account. See my ATO direct debit failed.
- Pay the missed amount now using your payment reference number, even before the arrears letter arrives. A same week catch up often means the ATO never needs to escalate.
- Check nothing else is overdue. A new BAS or return that was due at the same time is a separate breach. Lodge and pay it, or call to arrange cover for it.
- If you cannot catch up, call before the ATO writes to you. Ask to vary the plan. The ATO is far more flexible with someone who calls than someone it has to chase. See changing your plan.
Missed a payment? Fix it fast
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If the plan defaults
A default ends the instalment schedule. The whole overdue amount is due at once, GIC keeps compounding at 11.43%, and the ATO may move to firmer action: garnishee notices on bank accounts or customers, director penalty notices for company PAYG withholding, GST and super, and, for business debts of $100,000 or more, a notice of intent to disclose the debt to credit bureaus. A defaulted plan also counts toward the two defaults in 12 months rule that closes the online channel.
None of that is automatic on day one, and a new plan is usually still available if you move quickly and propose something you can keep. We cover the rebuild in defaulted payment plan.
What to do next
- Check your bank account and ATO online services to confirm the instalment was actually missed and why.
- Pay the missed instalment today with your payment reference number if you can.
- Lodge and pay anything else that fell due at the same time.
- If you cannot catch up within days, phone the ATO and ask to vary the plan before it defaults.
Related questions
How many payments can I miss before my ATO payment plan defaults?
There is no safe number. The ATO may put the plan into arrears after one missed instalment and default it if you do not act on the arrears letter or miss again. A second miss in quick succession, or a missed instalment combined with an unlodged BAS, will usually default the plan straight away.
Does a missed ATO instalment show on my credit file?
Not by itself. The ATO does not report individuals who are not in business, and it only reports business tax debts of $100,000 or more that are more than 90 days overdue and not under an active arrangement, after 28 days notice. A missed instalment matters because a defaulted plan can remove that protection for larger business debts.
Missed a payment? Fix it fast
A specialist can help you fix it before the plan defaults. Free, no judgement.
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