Plenty of owners leave an unpaid BAS until trade picks up. The ATO GIC rate for October to December 2026 is 11.51% a year (0.03153425% a day), compounding daily, so an $18,000 BAS left unpaid costs about $40 a week.
GIC is the general interest charge: interest the ATO adds to tax you haven’t paid by the due date. It goes on top of the debt, and GIC incurred on or after 1 July 2025 can’t be claimed as a tax deduction.
We wouldn’t use the ATO as a source of working capital. At 11.51% with no deduction, we’d pay GIC down before any debt that costs you less.
What Should You Do First About an Unpaid BAS?
Start by checking your ATO account, lodging anything outstanding, and working out what you can pay now or through a payment plan.
In Online services for business, open ‘Accounts and payments’, then ‘Account summary’. GIC also generally appears on a late payment notice or a GIC notice.
When we take over a file, we sometimes find ATO debt sitting there that nobody has looked at in months, with GIC adding to it every day.
Before proposing repayments:
- Check the overdue tax balance and the GIC already showing on the account.
- Identify any BAS or other returns that haven’t been lodged.
- Get outstanding lodgements up to date, so the balance on your account is the whole debt.
- Pay what you can now and put the rest on a plan.
- Check whether your BAS debt qualifies for the interest-free plan below.
If you can’t pay, still get the paperwork lodged. Our explanation of the ATO late lodgement penalty covers why.
As a registered tax agent, our ATO debt help starts with getting your overdue lodgements up to date, then we negotiate a payment plan with the ATO that you can keep. For clients, it costs nothing extra.
How Much Does the ATO GIC Rate Cost Your Venue?
At this quarter’s rate, a cafe doing about $20,000 a week with an unpaid $18,000 BAS adds about $40 a week in GIC.
That assumes you pay nothing off and the rate stays at 11.51% for all 60 days.
| What | Amount | How It Builds Up |
|---|---|---|
| BAS left unpaid | $18,000.00 | The starting debt |
| GIC on day 1 | $5.68 | 0.03153425% of $18,000, using the October to December 2026 daily rate |
| GIC after 30 days | $171.07 | Compounding daily |
| GIC after 60 days | $343.76 | About $40 a week |
| Total owed after 60 days | $18,343.76 | GIC is now charged on this balance |
That’s $343.76 the cafe owes for nothing, and it keeps growing until the BAS is paid. A cafe doing $20,000 a week turns over about $1 million a year, under the $2 million limit for the ATO’s interest-free plan below. If it meets the other conditions and keeps to that plan, the GIC charged while it’s on the plan comes off again.
The ATO sets the rate every quarter and usually announces the next one about 2 weeks before that quarter starts. If your debt runs into next year, check the ATO’s GIC rates page for each quarter’s rate before you budget repayments.
When Does GIC Apply, and Is It Tax Deductible?
The ATO can charge GIC on any tax still unpaid after its due date, and GIC incurred on or after 1 July 2025 isn’t tax deductible.
An overdue BAS is the one most venues hit. The ATO can also charge GIC when:
- A return is amended and there’s extra tax to pay.
- A PAYG instalment was underestimated.
- A return was lodged late.
The rate comes from section 8AAD of the Taxation Administration Act 1953. The daily rate is the annual rate divided by the days in the year, which is where the 0.03153425% in the table comes from.
And if the ATO later remits GIC incurred on or after 1 July 2025, you don’t include the remitted amount as interest income in your tax return.
We’d rank your debts by what each one costs you after tax and pay the dearest first, whoever sent the latest reminder.
How Is SIC Different From GIC?
SIC is the interest on extra tax that turns up when a tax return is amended. GIC is the interest on tax that’s still unpaid after its due date.
SIC stands for shortfall interest charge. It also compounds daily, and it runs from when the extra tax would have been due until the ATO corrects the assessment.
The extra tax and SIC are due 21 days after the ATO issues the notice of amended assessment.
So if your tax return is amended and there’s extra tax to pay, SIC covers the time up to the corrected assessment, and GIC takes over if you don’t pay by the new due date.
For October to December 2026, SIC is 7.51% a year, compared with GIC of 11.51% a year for that same quarter.
Can You Get an Interest-Free ATO Payment Plan?
Yes, if your business is small and the debt is from your BAS, the ATO may let you pay it off interest-free over 12 months.
A standard plan still has GIC compounding every day, so the longer you take, the more interest you pay.
To get the interest-free plan, the ATO says:
- Your annual turnover is less than $2 million.
- You owe $50,000 or less from recent activity statements, overdue for up to 12 months.
- You have a good payment and lodgement history, with no more than one payment plan default in the last 12 months.
- You have no activity statements still to lodge.
- You can’t get a loan through normal business channels.
- You can show the business is still viable.
The cafe above fits the turnover and debt limits, but its payment history and the other conditions still need checking.
You pay by direct debit, with the debt cleared within 12 months. As long as you keep to the plan, the ATO takes the GIC off automatically.
So if you’re on the interest-free plan and see GIC on your account, the plan hasn’t failed. The ATO adds the charge and then takes it off again.
If you already have an activity statement payment plan, phone the ATO’s business enquiry line to ask about changing it to interest-free.
For a standard plan, use the ATO payment plan estimator to assess the upfront amount, minimum repayment, repayment period and estimated interest.
Choose repayments you can cover alongside wages, suppliers and new tax obligations, so clearing the old BAS doesn’t leave you short for the next one.
If you fall behind on the plan or on your new tax, the plan can default and the whole overdue balance is due at once. If you’re behind, follow the steps for an ATO payment plan default.
The easiest way to avoid GIC is to put the BAS money aside each week from the takings it came from. Good hospitality accounting gives you that figure every week, so the quarter’s BAS is already sitting there when it’s due.
Will the ATO Remit Your GIC?
The ATO can remit GIC, but a request backed by a specific event and evidence is stronger than a general explanation that trade has been slow.
Remission means the ATO removes some or all of the interest charge. Don’t count on it in your repayment budget until the ATO has said yes.
The ATO says circumstances it would likely accept include:
- Natural disasters or industrial action affecting you or your tax or BAS agent.
- The unforeseen collapse of a major debtor.
- Sudden ill health of key personnel in a small business, or of your tax or BAS agent when you couldn’t reasonably make other arrangements.
- Theft of, or damage to, property critical to business operations.
- Bereavement of a family member.
In the ATO’s own example, a small business had critical equipment stolen, paid its BAS as soon as the insurance paid out, and had the GIC remitted. For a venue, that’s the coffee machine or the coolroom.
Circumstances it says it would likely decline include:
- Adverse business conditions affecting cash flow or a general economic downturn.
- Ordinary business risks, such as invoices being paid late.
- Using money to expand the business instead of paying overdue tax.
- Not giving your tax or BAS agent enough time to meet deadlines.
- Being on holidays when payment was due.
Explain the event, how it prevented payment, the steps you took and the supporting evidence.
The ATO also looks at whether the delay was in your control and at your track record. One late payment after several years of paying on time gets a kinder hearing, and if the GIC is about $2,500 or less, a good history counts for a lot.
Use the ATO’s remission request instructions to make your request. You can send the ATO’s GIC remission form (it has to be the Excel version) through Online services for business, or ask by phone or mail.
If you ask by phone and the amount is more than $2,500, a dedicated team handles it, so you won’t get an answer on the call.
If the ATO declines, you can’t lodge an objection or seek review through the Administrative Review Tribunal, though judicial review in the Federal Court is still open. You can submit a new request if you left out key information or believe the ATO made an error.
Key Takeaways
- Budget using the right quarter: the ATO GIC rate for October to December 2026 is 11.51% a year, compounding daily.
- Check your ATO account and lodge anything outstanding before you offer repayments, so you know the whole debt.
- Treat GIC incurred on or after 1 July 2025 as a non-deductible cost when deciding which debts to clear.
- Ask about the interest-free activity statement plan if you meet the conditions; standard payment plans still attract GIC.
- Slow trade on its own is on the ATO’s likely-decline list, so back a remission request with a specific event, evidence and the steps you took.
If you’d like help with working out what GIC is costing your venue and getting your BAS debt under control, you can reach us at (02) 9768 5922 or enquiries@getroger.com.au for a free, no-obligations chat.