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  • Payment plans

    We understand that sometimes it can be difficult to pay in full by the due date, however you may be able to set up a payment plan to pay your debt in manageable smaller payments over an agreed period of time.

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    What is a payment plan?

    A payment plan is a practical way to meet your payment obligations.

    A payment plan allows you to break down your payment into smaller amounts that are made via instalments and spread over a fixed period of time. Within a payment plan, you pay back a sum of money weekly, fortnightly or monthly until the balance is cleared.

    Who can enter into a payment plan?

    Individuals, sole traders, businesses and tax practitioners on behalf of their clients.

    What to do before setting up a payment plan

    When thinking about setting up a payment plan you need to consider:

    • how much you can pay so you can meet each scheduled instalment (including interest that may accrue on any overdue amounts)
    • your future obligations.

    We also recommend you use the ATO online payment plan estimator to calculate a payment plan you can afford. This tool will also help you work out how quickly you can pay off a tax debt and how much interest you’ll be charged. The longer you take to pay off your debt, the more interest you'll need to pay.

    Once you've worked out a suitable payment scenario based on your circumstances, you can use it as a guide to set up a payment plan to meet your tax obligations.

    You can’t use this estimator for super guarantee charge debts.

    Important information for taxpayers who enter into a payment plan arrangement

    • Any tax credits and refunds you receive will be used to reduce your tax debt but won't replace the required instalment payment. This is called offsetting. Offsetting is where we use a credit or refund from one account to pay off an outstanding debt on another account.
    • General interest charge (GIC) will accrue until the debt is paid.
    • You can make additional voluntary payments or pay off the debt at any time.
    • You still need to lodge your activity statements and tax returns and pay any associated liabilities on time.

    Setting up a payment plan

    If you contact us to set up a payment plan, we may need more detail about your financial situation and circumstances. This is so we can work with you to create a manageable payment plan that suits both of us.

    To set up a payment plan without our assistance, see the information below for your circumstances:

    Next steps

    Individuals and sole traders

    The easiest way to set up a payment plan if you owe $100,000 or less is to use our online services.

    To use our online services, you'll need a myGov account linked to the ATO. You may be eligible to set up, adjust or cancel an existing payment plan.

    Our aim is to help you pay amounts you owe in the shortest time and save you interest.

    When you set up a payment plan, you'll be provided with:

    • an upfront amount you need to pay
    • examples of 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.

    If you can't afford a payment plan that’s offered online, or you owe more than $100,000, phone us on 13 11 42 during our operating hours to discuss your options.

    Before you call, we recommend using our payment plan estimator to work out a plan you can afford.

    Next steps

    Businesses

    If your business owes $100,000 or less, you can set up a payment plan:

    • via Online services for business and choosing Accounts and payments then payment plans
    • by phoning our automated phone service on 13 72 26
    • through your registered tax agent or BAS agent who can use online services to enter a payment plan on your behalf.

    If you can't enter into a payment plan using our automated phone service, you'll be connected to a person (during our operating hours) who will be able to help you.

    To set up a payment plan you'll need your ABN or TFN, and the full details of your outstanding amount.

    If you have overdue amounts from activity statements, you may be eligible for an interest-free payment plan.

    If your business owes over $100,000, phone us on 13 11 42 during our operating hours to discuss your options.

    Before you call, we recommend using our payment plan estimator to work out a plan you can afford.

    Next steps

    For more information, see Business self service.

    Registered agents

    If you're a registered tax or BAS agent, you can use our Online services for agents to view, set up, adjust or cancel a payment plan for your client.

    You can set up a payment plan if your client:

    • has an existing debit amount less than $100,000 (total balance or overdue amounts)
    • does not already have a payment plan for that debit amount

    If your client doesn’t meet these requirements, you can call us to discuss their options.

    Next steps

    Automated phone service

    You may be able to use our automated phone service to arrange a late payment or to set up a payment plan. You'll need your Australian business number (ABN) or tax file number (TFN) and the full details of your outstanding amount.

    If you can't enter into a payment plan through our automated phone service, you’ll be connected to a person who will help you (during our operating hours).

    Next step

    Interest-free payment plans for overdue activity statement amounts

    Small businesses that owe activity statement amounts may be able to make interest-free payments over 12 months.

    Eligibility

    You may be eligible for an interest-free payment plan if your business:

    • has an annual turnover of less than $2 million
    • has recent amounts owed from an activity statement of $50,000 or less that has been overdue for no longer than 12 months
    • has good payment and lodgment history including                
      • no more than one payment plan default within the last 12 months
      • no outstanding activity statement lodgments.
       
    • is unable to obtain finance (such as a loan) through normal business channels
    • is able to demonstrate ongoing viability.

    How it works

    You must agree to a payment plan that allows the amounts owed to be paid by direct debit within 12 months. Even if you receive a letter stating that interest will apply, it will be remitted as long as you maintain your payment plan.

    While you're paying your bill:

    • you can check your running account balance by logging into the Online services for businessExternal Link, or phoning us on 13 28 66 (8.00am to 6.00pm, Monday to Friday)
    • you must meet all of your other payment and lodgment obligations.

    Registered tax or BAS agents can check the running account balance by using Online services for agents, or phoning 13 72 86 (Fast Key Code 1 2 5 1).

    If you're already in a payment plan

    You can ask us to change your existing payment plan to an interest-free payment plan if you satisfy the eligibility criteria.

    If your request is approved, we’ll cancel your previous plan. The interest-free period will start from the date you enter into the new plan.

    Next step

    • Phone us on 13 28 66 during our operating hours to change to an interest-free payment plan if eligible.

    Managing your payment plan

    Setting up direct debit

    The easiest way to stay on top of your payment plan instalments is to set up a direct debit for automatic debit every time your payment is due. You can set up direct debit payments at the same time you set up your payment plan – from either a financial institution (bank) account or a credit/debit card. Only the card holder can set up a direct debit payment plan using a credit/debit card. Alternatively, you can pay individual instalments with your credit card or any of the other payment options available for paying the ATO.

    Changing how you pay your instalments

    You can modify an instalment from direct debit to a different payment method.

    When updating a payment plan, you can change the payment method by:

    • choosing a different payment method (you must allow at least one business day to process this request), or
    • delinking the payment plan from one credit/debit card and linking it to another card.

    Find out about

    Modifying instalments

    You can also modify an instalment date or amount or cancel an instalment.

    You will need to do this at least two days before the payment date. A payment plan cannot be modified online if the current plan extends for longer than 24 months or if the changes will extend the plan by longer than 24 months.

    You can update the instalment amounts of your payment plan through our online services.

    Individuals and sole traders can adjust their payment plans through online services.

    Businesses can view or update their plan through Online services for business – on the ‘Payment Plan’ page.

    Tax and BAS agents will be able to amend payment plans through Online services for agents, however they will not be able to modify the payment plan or instalment schedule if the payment method is direct debit via credit or debit card, only the card holder can do this.

    Checking the status of your payment plan

    Individuals and sole traders can view the status of their payment plan in ATO Online Services. From the Tax menu in ATO Online Services, select ‘Payment’ and then select ‘Payment Plans’ from the next menu.

    Business clients can check their payment plan status from the ‘Accounts and Payments’ menu in Online Services for Business. To see more detailed information about each payment plan status, click the help icon.

    Arrears status

    If you’ve missed a scheduled instalment and/or haven’t paid another tax obligation by the due date, you may still have time to pay before your payment plan defaults.

    You may receive a letter from us informing you that your accounts are in ‘arrears’, and you have an opportunity to catch up before your payment plan defaults. The ‘arrears’ letter will outline the minimum amount you will need to pay now to prevent your payment plan from defaulting and other action(s) you need to take.

    myGov users will receive the letter through their myGov inbox in the first instance. If you have set up a preference to send correspondence to your tax agent, the arrears letter will be sent to your agent.

    Secured payment plans

    If we can't reach an agreement with you about paying amounts you owe, we may consider accepting an offer of security where you either:

    • request we defer the time of payment of a debt
    • seek to pay a debt by instalments.

    Our preferred securities are:

    • a registered mortgage over freehold property
    • an unconditional bank guarantee from an Australian bank.

    For more information about a secured payment phone us on 13 11 42 during our operating hours.

    For more information, see PS LA 2011/14 General debt collection powers and principles.

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    Last modified: 13 May 2022QC 69390