Insights · ATO debt · 31 October 2026

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The ATO is charging 11.51% interest: what a tax debt really costs

For October to December 2026, the ATO general interest charge (GIC) is 11.51% a year, or 0.03153425% a day. It compounds daily on overdue tax, and from 1 July 2025 it can no longer be claimed as a tax deduction.

The numbers

• October–December 2026: 11.51% a year (0.03153425% a day).
• July–September 2026: 11.43% a year.
• The rate is reset each quarter and is usually announced about two weeks before the quarter starts.

What that means in dollars

At 11.51% compounding daily, a $50,000 overdue BAS debt grows by roughly $15 to $16 a day, or about $6,000 over a year if nothing is paid. Because GIC is not deductible, that cost comes straight out of after-tax profit.

What to do if you owe the ATO

1. Keep lodging on time, even if you cannot pay. Late lodgment adds penalties and can lead to director penalty notices.
2. Talk to the ATO early. A payment plan you can actually keep is better than silence.
3. Compare the cost. If a business loan is cheaper than 11.51% after tax, refinancing the debt may make sense. See getting lender ready.
4. Fix the cause. Most tax debts start with tax money being spent on running the business: how much tax to set aside.

More: what to do if you owe the ATO, missed a BAS due date, or our ATO debt help.

Quick answers

What is the ATO GIC rate for October to December 2026?

11.51% a year, or 0.03153425% a day, compounding daily.

Is the general interest charge tax deductible?

Not for income years starting on or after 1 July 2025.

Related reading: ATO payment plans

Sources

• ATO: General interest charge (GIC) rates
• ATO: General interest charge

General information only. This article does not take into account your circumstances and is not tax, legal or financial advice. Rates and rules change; check the sources above and get advice for your business before acting.