Do you have a tax bill? Are you struggling with fines and interest? A payment plan with the Australian Tax Office (ATO) could turn everything around.

What Is an ATO Payment Plan?

An ATO payment plan is an effective and manageable way to get on top of personal and business tax debt. Once a plan has been negotiated and agreed upon, it becomes a formal arrangement with the ATO. Payment plans allow instalments to be paid over a fixed period of time, be it weekly, fortnightly or monthly, until the debt is cleared (as opposed to a lump-sum payment).

Why Are Payment Plans A Good Option?

Payment plans can significantly ease the financial and emotional pressure of an outstanding debt. By paying it off slowly, you or your business can maintain cash flow; allowing you to still meet other financial obligations and keep up with living costs.

Crucially, payment plans can also avoid further debt or more serious consequences. If a debt is not being addressed, discussed or disputed with the ATO, they may start to take more aggressive action against you in the way of garnishee notices, director penalty notices (DPN) or statutory demands.

Eligibility And How To Get Started

Individuals, sole traders, businesses and tax agents (on behalf of clients) can enter into a payment plan with the ATO. For tax debts that are $100,000 or less, payment plans can be requested online through a myGov account. To create a plan for debts in excess of $100,000, the ATO must be phoned. The ATO offers a payment plan calculator to help estimate manageable repayment amounts.

To get started, the best first step is to contact our friendly team at Tax Negotiators. Not only can we help to form a payment plan, we can assist in debt negotiation, too. Taking action as soon as possible reduces being at risk of more serious recovery strategies by the ATO and leads to faster financial recovery. To help your case with the ATO, it is strongly recommended to be open, honest and show a proactive approach to resolving your debt.

Important Notes About ATO Payment Plans

  • Payment plans incur a General Interest Charge (GIC) until the entire debt is paid
  • Tax refunds and credits will be automatically applied to your tax debt, however they will not take the place of the agreed instalments
  • Additional, voluntary contributions are permitted at any time
  • Usual tax obligations, such as BAS and tax returns are still required

To start organising your payment plan, contact us here today!


Revive Financial. ‘Benefits Of An ATO Payment Plan’, Revive Financial, Online, 2019, (Accessed 18 July 2022)