What is the shortfall interest charge (SIC)?
Short answer
The shortfall interest charge (SIC) is interest the ATO charges when your income tax assessment is amended and you owe more than you originally paid. It runs from the original due date to the day before the amended assessment is issued, at a lower rate than general interest charge: 7.43% for July to September 2026, compared with 11.43% GIC. Like GIC, it can be reduced through remission.
How SIC works
SIC exists because a shortfall is different from a late payment. If you lodged and paid on time and the ATO later amends your return, you did not know about the extra tax until the amended notice arrived. It would be harsh to charge full GIC for that period. So the law applies a softer charge: the 90 day bank bill rate plus 3%, instead of the 7% uplift used for GIC.
SIC is calculated on the shortfall only, compounding daily, from the day the original tax was due until the day before the amended assessment is issued. It applies to income tax amendments and appears as a separate line on the amended notice. SIC incurred on or after 1 July 2025 is not tax deductible.
SIC versus GIC
| SIC | GIC | |
|---|---|---|
| When it applies | Tax shortfall found by an amended assessment | Any tax or charge unpaid after its due date |
| Period | Original due date to the amended notice | Day after due date until paid |
| Uplift | Bank bill rate plus 3% | Bank bill rate plus 7% |
| July to September 2026 | 7.43% | 11.43% |
| Deductible | No, from 1 July 2025 | No, from 1 July 2025 |
| Objection rights | Yes, if remaining SIC is over 20% of the shortfall | No, judicial review only |
Received an amended assessment with interest?
Find out whether the SIC can be reduced before the 21 days run out.
What happens after the amended assessment
The amended notice gives you 21 days to pay the shortfall and the SIC. If the amount is still unpaid after that, the ATO switches to GIC, and GIC is charged on both the unpaid tax and the unpaid SIC. That is the point where the cost of a shortfall jumps, so the 21 days are worth taking seriously.
If you cannot pay within 21 days, an ATO payment plan can be set up on the amended debt like any other. If you disagree with the amendment itself, that is an objection against the assessment, which has its own deadlines. Our page on disputing an ATO debt covers that path. Lodging an objection does not pause interest, so many people pay what they can while the dispute runs.
Can SIC be remitted?
Yes. The ATO can remit SIC in full or in part. The things that help are: you found and disclosed the error yourself rather than the ATO finding it in an audit, ATO delay added to the period, or the shortfall came from something outside your control such as a third party issuing wrong information. Paying the expected shortfall before the amended notice issues also reduces what SIC is charged on. Unlike GIC, you can object to a SIC remission decision if the amount left after remission is more than 20% of the shortfall.
What to do next
- Read the amended notice of assessment and separate the tax shortfall from the SIC line.
- Pay or arrange a payment plan within the 21 days so GIC does not take over.
- If the error was disclosed voluntarily or caused by ATO delay, put in a written SIC remission request.
Related questions
Does SIC apply to BAS or GST amendments?
No. SIC applies to income tax and petroleum resource rent tax amendments. If a BAS is amended and more GST or PAYG withholding is owed, the ATO generally charges GIC from the original due date instead, which runs at the higher rate.
Can I pay the shortfall before the amended assessment to stop SIC?
Yes. If you know an amendment is coming, for example after a voluntary disclosure, you can pay the expected amount early. SIC is calculated on the unpaid shortfall, so an early payment reduces it, and the ATO treats early payment as a factor in favour of remitting what is left.
Received an amended assessment with interest?
Find out whether the SIC can be reduced before the 21 days run out.
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