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Credit interest rates and calculation

Calculation and interest rates for interest we pay on early payments, overpayments and delay in paying your refund.

Last updated 11 December 2023

Calculation and interest rates for interest we pay on early payments, overpayments and delay in paying your refund.

Interest rates

The rate we use to calculate the amount of interest is set by law. We review and update the rate each quarter.

We only pay interest amounts of 50c or more.

Interest rates used for calculation of early payments, overpayments, and delayed refunds (2023–24)

Period

Interest rate
(% pa)

1 July 2023 to 30 September 2023

3.90

1 October 2023 to 31 December 2023

4.15

 1 January 2024 to 31 March 2024

4.38

Interest rates used for calculation of early payments, overpayments, and delayed refunds (2022–23)

Period

Interest rate
(% pa)

1 July 2022 to 30 September 2022

1.00

1 October 2022 to 31 December 2022

2.31

1 January 2023 to 31 March 2023

3.06

1 April 2023 to 30 June 2023

3.46

Interest rates used for calculation of early payments, overpayments, and delayed refunds (2021–22)

Period

Interest rate
(% pa)

1 July 2021 to 30 September 2021

0.04

1 October 2021 to 31 December 2021

0.01

1 January 2022 to 31 March 2022

0.04

1 April 2022 to 30 June 2022

0.07

To view rates for previous years, see:

How to calculate the interest amount

Use the following formula to calculate the interest amount:

(A ÷ B) × C × (D ÷ 100)

Where:

  • A is the number of days in the period you are entitled to interest
  • B is the number of days in the year (for example, 365 for non-leap years and 366 for leap years)
  • C is the amount on which the interest is payable
  • D is the interest rate for the period.

You can also use the Interest on early payment calculator to work out the interest amount.

From March 2022, we will automate the calculation and payment of interest on early payments. This process applies to amounts you paid us since 1 July 2021. We will pay the interest directly to your nominated bank account.

Example of credit interest calculation

The following example shows how to calculate the interest amount. The example assumes a normal year (365 days) and uses a single interest rate of 2%.

Example: Single early payment

Evan pays an amount of $1,926 more than 14 days before the payment due date. His early payment interest is based on the following:

  • On 29 October, the ATO issues Evan's notice of assessment showing a tax debt of $1,926.
  • Evan's due date for payment of this debt is 21 November of the same year.
  • Evan paid his tax debt in full at the post office on 3 November.

To calculate the interest amount, work out the number of days from 3 November to 21 November including these 2 days. This is a period of 19 days.

(19 ÷ 365) × $1,926 × (2 ÷ 100) = $2.01

Evan’s interest on early payment amount is $2.01.

He must include $2.01 as income in his tax return at 'Gross interest' in the income year he receives the interest or it is applied against his tax debt.

End of example








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