How do I set up a payment plan with the ATO in Australia?

If you cannot pay your tax debt in full by the due date, you can arrange a payment plan (also called a payment arrangement) with the ATO. This allows you to pay the debt in instalments over time and avoids immediate enforcement action.

Setting up a payment plan online: For most individuals with debts under A$100,000, you can set up a payment plan yourself through myGov linked to the ATO, or through the ATO's online services for individuals. Log in, go to 'Tax', then 'Payments and finances', and select 'Set up a payment plan'. You choose the amount you can pay each fortnight or month, and the ATO calculates a plan that clears the debt within an acceptable timeframe.

Phone or agent: For larger debts or more complex situations, call the ATO on 13 11 42 (for individuals) or ask your tax agent to negotiate on your behalf. The ATO generally aims to have debts repaid within 12 months; longer arrangements require additional justification about your financial circumstances.

General interest charge (GIC): Interest continues to accrue on unpaid tax debts at the General Interest Charge rate (around 11-12% per annum in 2024-25, set quarterly). This interest is itself tax deductible for some taxpayers. The sooner you pay, the less interest accrues.

What happens if you miss a payment: Missing an instalment can cancel the plan and the full debt becomes due. Contact the ATO as soon as you know you will miss a payment — they may allow a one-time adjustment. Consistent non-payment can lead to enforcement action including debt collection, garnishing of wages, or legal proceedings.