What is a payment plan
You need to lodge and pay your tax bills in full and on time to avoid penalties, general interest charges (GIC) and firmer actions. However, if you’re experiencing financial difficulties, you may be eligible to set up a payment plan.
A payment plan allows you to break down your payment into smaller amounts that are made via instalments and are spread over the shortest possible fixed period of time. When you set up a payment plan, you pay an agreed sum of money weekly, fortnightly or monthly until the balance is cleared. You must also pay any future tax debts in full and on time.
Tax debts on a payment plan continue to accrue GIC, which compounds daily. Therefore, paying your debt in the shortest period of time will help reduce the GIC that you’ll pay. The longer you take to pay your debt, the more interest you'll pay.
How we decide if you are eligible
We consider many factors when you apply to set up a payment plan. Depending on the circumstances, you may not be eligible for a payment plan on the terms you suggest or at all.
If you tried setting up a payment plan online or through our self-help phone line and it wasn't accepted, phone our lodge and pay enquiry line during operating hours.
We can look at your situation and discuss your eligibility. Before you ring, make sure you have the information you need to prove your identity.
Before setting up a payment plan
Before setting up a payment plan you should consider:
- how much you can pay today
- when you'll be able to pay in full.
Remember to take into account any payments you will owe for your future tax and super obligations.
Additionally, your income tax and activity statement accounts require separate payment plans to be set up. If you have multiple accounts with overdue debts, you'll need to pay them in full or set up separate payment plans. If you don't, you may be subject to firmer action.
Online payment plan estimator
You can use our online payment plan estimator to calculate what payment plan you can afford. This tool will help you work out:
- how much you may need to pay upfront
- what your minimum repayment may be
- how quickly you could pay off your tax debt
- an estimate of how much interest you’ll be charged.
To help you save on interest, the calculator will guide you to pay what you owe in the shortest time. It will provide you with:
- an upfront amount you need to pay
- suggested instalment amounts that have been manageable for clients with similar circumstances to yours.
You can vary the upfront and instalment amounts above or below the amounts provided, up to certain values.
Once you work out a suitable payment schedule based on your circumstances, that also meets our requirements, you can use it as a guide to set up a payment plan using our online services or our self-help phone line.
You can't use this estimator for super guarantee charge debts. To get help managing your super obligations, you can phone our lodge and pay enquiry line.
Consider your ongoing payment obligations
In addition to your paying your payment plan instalments, you still need to consider your ongoing tax obligations. If you don't, your payment plan may default, making the full overdue balance immediately payable. Therefore, it's important to:
- lodge all your obligations on time
- pay any new tax debts in full and on time, or set up a separate payment plan to manage the new debt.
You should also be aware that:
- any tax refunds or credits you're entitled to will be used to reduce your tax debt (offsetting) – this will not replace the required instalment payment
- you can make additional voluntary payments or pay off the debt at any time.
Support for people experiencing vulnerability
If you're facing challenging personal circumstances and need extra help managing your tax obligations, visit Tax support for when you need it most for other support options available to people experiencing vulnerability.