Why is there a garnishee fee on my bank statement?

What the fee actually is

When a bank receives a garnishee notice it has to search its records, freeze or transfer the relevant amount, send the money and write to you. Most banks charge a flat administration fee for that work and debit it from the same account. The amount is set by the bank in its fee schedule and varies between banks. It is charged per notice processed, so a continuing notice can attract the fee more than once.

The fee turns up on statements under different labels, including "garnishee fee", "garnishee order fee", "third party notice fee", "legal processing fee" or "court order processing". Whatever the wording, it is the bank's fee for complying, not a penalty from the ATO. It also does not reduce your tax debt. Only the amount actually paid over to the ATO does that.

Is it the ATO, or someone else?

The ATO is the most common source, because it can issue a garnishee notice directly without going to court. Other creditors, such as a lender or a supplier with a court judgment against you, can obtain a garnishee order through a court and serve it on the bank, and the fee looks identical. To tell the difference:

• Look at the matching transaction. An ATO garnishee usually shows a transfer to the Australian Taxation Office or a reference to the ATO or the Commissioner of Taxation. A court garnishee shows a solicitor, a debt collector or a court name.
• Ring the bank. Ask who served the notice, the date, the amount and whether it is one-off or continuing. The bank cannot refuse the notice, but it can tell you what it received.
• Check your ATO account. Log in to ATO online services and look for a garnishee credit and a copy of the notice in your inbox. The ATO must serve a copy on you, though it often arrives after the bank has acted.

If you are being asked to pay someone to "cancel the garnishee" by gift card, crypto or transfer to a personal account, stop. That is a scam, not the ATO. See how to check ATO contact is real.

What to do now

If the fee is the first you have heard of a garnishee, treat it as a signal that the ATO has moved to firmer action on your debt. The steps that matter are the same as for any bank account garnishee:

1. Find out whether the notice is one-off or continuing. A continuing notice keeps taking deposits until the debt is paid or the notice is withdrawn.
2. Deal with anything that is about to bounce.
3. Bring overdue lodgements up to date, because the ATO will not negotiate over a debt it cannot see.
4. Call the ATO on 13 11 42 to set up a payment plan and ask for the notice to be withdrawn. The ATO says it may withdraw or vary a notice once suitable payment arrangements are in place.

You can ask the bank to waive the fee, particularly if you are a long standing customer or in hardship, but there is no obligation on it to do so. The bigger issue is the debt behind the notice. Read what to do when the ATO has taken money from your account for the full sequence.

What to do next

1. Look for the matching transaction to the ATO on the same statement and ring the bank to confirm who served the notice and whether it is continuing.
2. Log in to ATO online services to check your balance and find your copy of the notice.
3. Bring lodgements up to date and call the ATO on 13 11 42 about a payment plan and withdrawal of the notice.

More questions: 8 Garnishee notice questions questions answered · Full guide: Garnishee notices