When should you enter into a payment plan

If you’re experiencing financial difficulties, you may be eligible to set up a payment plan.

If you receive a tax bill, you need to pay in full and on time to avoid general interest charges (GIC). However, if you’re experiencing financial difficulties you may be eligible to set up a payment plan.

If you’re eligible, and have a tax bill up to $200,000 you may be able to set up your own payment plan using our online services or self-help phone service.

Before you set up a payment plan with the ATO, you need to know your business is viable.

Payment plans require an up-front payment and should be completed within the shortest possible timeframe. This is to minimise GIC that will continue to accrue.

Paying in full and on time costs you less than a payment plan because overdue tax debts are subject to GIC.

GIC is currently 11.15% and is compounded daily. For example: If you received a $20,000 tax bill and set up a 12–month payment plan, you would pay an additional $2,359.82 in accrued GIC over the payment plan period. This example is based on the current rate of GIC, which is updated quarterly.

We are committed to supporting small businesses who may be in financial distress get back on track. We encourage small businesses that may be experiencing financial difficulties, to contact us or talk to our registered tax or BAS agent before the due date, or as early as possible for an existing debt, to discuss the support available.

Source: ATO