Tax Payment Plans in Australia: How to Stay Compliant and Manage Your Finances Effectively
- Arnold Shields
- Jun 26, 2024
- 3 min read
Updated: May 12
Struggling With a Tax Debt? The ATO Offers Payment Plans That Can Help
Let’s face it, staying on top of tax obligations isn’t always easy. If you’re an individual or business owner dealing with tax debt, you’re not alone.
The Australian Taxation Office (ATO) understands this and offers tax payment plans to ease the burden and keep you on track.
Whether it’s income tax, GST or PAYG instalments, here’s what you need to know about setting up a payment plan and staying compliant.
What Is a Tax Payment Plan?
A tax payment plan is an agreement with the ATO to pay your tax debt in instalments over time. It’s designed to reduce financial stress while helping you meet your tax obligations. Plans are available for most types of tax debts and can be tailored to your situation.
Types of ATO Payment Plans
1. Self-Managed Payment Plans
Ideal for individuals and small businesses with tax debts under $100,000. You can set this up yourself online through MyGov or the ATO portal. It’s quick, flexible, and lets you control the payment frequency and amounts.
2. Tailored Payment Plans
For larger or more complex debts, contact the ATO directly to negotiate a plan. Tailored arrangements are built around your financial capacity and offer greater flexibility.
3. Interest-Free Payment Plans
In exceptional circumstances — such as natural disasters or proven financial hardship — you may be eligible for an interest-free plan. The ATO assesses these case-by-case.
How to Apply for a Tax Payment Plan
Step 1: Assess Your Finances
Work out how much you can afford to repay without overcommitting.
Step 2: Choose How to Apply
Online: Use MyGov or the ATO business portal (for debts up to $100,000).
Phone: Call the ATO on 13 11 42.
In Writing: For complex situations, you can apply in writing.
Step 3: Provide Financial Information
Be ready to share your income, expenses, and assets to support your request.
Step 4: Agree to the Terms
The ATO will offer payment terms based on your situation. Review and accept before the plan is activated.
Managing Your Payment Plan
Once approved, it’s vital to stay on top of your plan:
Make payments on time — missed payments may cancel your plan and attract penalties.
Update the ATO about changes — if your income drops or other financial issues arise, request a plan review.
Keep lodging new returns — payment plans don’t exempt you from keeping up with current tax obligations.
Pros and Cons of ATO Payment Plans
✅ Benefits
Reduces financial pressure
Prevents legal action or further penalties
Plans are flexible and can be adjusted
⚠️ Considerations
Interest may apply (unless waived)
Ongoing compliance with current obligations is mandatory
Missing payments can lead to default and increased enforcement
Final Thoughts
ATO tax payment plans can be a lifesaver for individuals and businesses facing financial pressure. With the right plan in place, you can stay compliant, avoid penalties, and regain financial control.
Need help setting up a plan or negotiating with the ATO?
Call Dolman Bateman on 02 9411 5422, our expert team will guide you through your options and find the best fit for your financial circumstances to help you navigate your options and find the best solution for your financial situation.
Disclaimer:
The information provided in this article is general in nature and does not constitute personal financial, legal or tax advice. While every effort has been made to ensure the accuracy of this content at the time of publication, tax laws and regulations may change, and individual circumstances vary. Dolman Bateman accepts no responsibility or liability for any loss or damage incurred as a result of acting on or relying upon any of the information contained herein. You should seek professional advice tailored to your specific situation before making any financial or tax decision.