Introduction

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

End of attention

Who is entitled to interest on early payments and over payments?

The interest arrangements apply to individuals, taxable trusts, companies and superannuation funds. Interest is payable if it is 50 cents or more.

Note: This fact sheet relates only to individuals and taxable trusts. It does not cover interest entitlements for companies, superannuation funds, corporate unit trusts and public trading trusts.

When did the interest arrangements begin?

The interest arrangements outlined in this fact sheet apply to:

• early payments of tax made by taxpayers on or after 1 July 1994 for a debt for the 1993-94 or later income years
• overpayments of tax from the 1993-94 income year, and
• delayed refunds of running balance account (RBA) surpluses that arose on or after 1 July 2000.

What is the interest rate?

The rate used in calculating your interest is set by law and is reviewed every quarter.

Interest rates for 2004-05 are shown in the table below.

Details of other quarterly interest rates are available from the Tax Office.

How is interest calculated?

Interest is generally calculated as follows:

(number of days ÷ 365 [see note]*) × amount of payment × (interest rate for period ÷ 100

Note: 366 for a leap year