ATO General Interest Charge (GIC), explained
The ATO's General Interest Charge is the headline interest cost on unpaid tax debt. It compounds daily, the rate is set quarterly, and from 1 July 2025 the charge is no longer tax-deductible. The current rate (Jul–Sep 2026) is 11.43% annual.
What is General Interest Charge?
General Interest Charge (GIC) is interest the ATO charges under section 8AAB of the Taxation Administration Act 1953 on outstanding tax liabilities. It applies to most unpaid tax debts — including income tax, GST owing on a BAS, PAYG withholding, and Super Guarantee Charge — when payment is not made by the due date.
The rate is set quarterly. The rate for the July–September 2026 quarter is 11.43% per annum (0.03131507% daily). GIC compounds daily on the outstanding balance.
No longer deductible
Until 30 June 2025, GIC and Shortfall Interest Charge (SIC) were generally tax-deductible expenses. Following the Treasury Laws Amendment (Tax Incentives and Integrity) Bill 2024, which passed Parliament on 26 March 2025, GIC and SIC incurred from 1 July 2025 are no longer deductible.
The practical effect is that the effective cost of carrying an ATO debt rose materially from that date. An 11.43% non-deductible interest cost is roughly equivalent to a deductible cost of around 15% before tax for a company on the small business tax rate — depending on the entity's specific tax position.
Remission under s8AAG
Section 8AAG of the Taxation Administration Act 1953 gives the Commissioner of Taxation a discretion to remit GIC where remission is fair and reasonable. The ATO publishes practice statement guidance and case-by-case factors — for example, illness, natural disaster, key-supplier failure, or other genuine business hardship.
A free financial counsellor at the Small Business Debt Helpline (1800 413 828) can help structure a remission request that engages the relevant factors. Remission is not automatic, and requesting it after a default is harder than requesting it as part of a sustainable engagement.
GIC continues during a payment plan
Entering a payment plan does not stop GIC accruing. The interest continues to compound daily on the outstanding balance until the debt is cleared. Plans should be set at a level that pays down the principal faster than GIC accrues — otherwise the debt grows.
A payment plan that becomes unsustainable is harder to renegotiate than a first plan. SBDH will help you stress-test the plan before you commit.
Key facts
- Jul–Sep 2026 rate
- 11.43% per annum, 0.03131507% per day, compounding daily.
- Non-deductible from 1 July 2025
- GIC and SIC incurred from this date are not deductible — the effective cost is higher than the headline rate.
- Set quarterly
- GIC rate is published on the ATO website each quarter and changes with market rates.
- Remission discretion
- The Commissioner can remit GIC under s8AAG TAA 1953 where remission is fair and reasonable.
Frequently asked questions
Sources
- ATO — General Interest Charge rates
- Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025
- Taxation Administration Act 1953 — Section 8AAG
We do not refer to commercial debt-relief operators.
Every service we point you to is free or low-cost, government-funded or not-for-profit, and independent of creditors. If a paid operator is offering to negotiate your ATO debt or run a Part IX agreement for a fee, talk to the Small Business Debt Helpline first — 1800 413 828, free.
This can get clearer from here.
TEKVA provides information, not financial counselling or legal advice. Checked July 2026.