General interest charge on ATO debt

The general interest charge (GIC) is the interest the ATO charges on overdue tax debts. For October to December 2026 it is 11.51% a year, worked out daily and compounding, and it keeps accruing until the debt is paid, including while a payment plan runs. Since 1 July 2025, GIC is no longer tax deductible, which makes ATO debt one of the more expensive debts a business can carry.

Current GIC rates

The ATO publishes a new rate each quarter. Check the ATO’s rates page for the latest figure.

What GIC costs: an illustration

These figures assume an overdue debt of $50,000 and that the rate stays at 11.51% a year, compounding daily:

This is an illustration only, not a calculation of your debt. Actual amounts depend on the rate each quarter, payments made and the exact dates.

GIC is no longer tax deductible

From 1 July 2025, GIC and shortfall interest charge are not deductible. Before then, many businesses treated GIC as a deductible cost of carrying the debt. The after-tax cost of leaving ATO debt unpaid is now higher.

How to reduce GIC

• Pay sooner. Every payment reduces the balance GIC is charged on.
• Ask for remission if the delay was outside your control, or if remission would be fair and reasonable. See can ATO debt be reduced?
• Do not rely on a payment plan alone. GIC continues to accrue under a payment plan.
• Deal with the whole problem. If the business cannot pay its debts as they fall due, a formal option such as small business restructuring may deal with the ATO debt, interest included, as part of a plan.

Common questions

What is the ATO general interest charge rate?

For October to December 2026 the annual rate is 11.51%, a daily rate of 0.03153425%. For July to September 2026 it was 11.43%. The ATO sets the rate each quarter.

How is GIC calculated?

GIC is worked out daily, at the daily rate for the quarter, on the overdue amount, and it compounds. It keeps accruing until the debt is paid.

Is GIC tax deductible?

Not from 1 July 2025. GIC and shortfall interest charge incurred in income years starting on or after 1 July 2025 are no longer deductible.

Does an ATO payment plan stop GIC?

No. GIC continues to accrue on the overdue balance while a payment plan runs.

Can I ask the ATO to remit GIC?

Yes. The ATO considers whether the delay was outside your control and, if you were responsible, whether it is fair and reasonable to remit. You need to explain the circumstances and what you did to reduce their effects.

Sources: Australian Taxation Office, General interest charge (GIC) rates; Australian Taxation Office, Remission of interest charges; Taxation Administration Act 1953 (Cth) section 8AAD; Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 (Cth). This page is general information, not advice about your circumstances. Last reviewed: 9 October 2026.