Key Highlights

  • The annual general interest charge rate is 11.51%.
  • The annual rate rose each quarter from 10.65% to 10.96%, 11.43% and 11.51%.
  • The increase from the first to the fourth quarter was 0.86 percentage points.
  • GIC accrues daily on unpaid amounts and compounds over time.

Owing the Australian Taxation Office has become steadily more expensive this year. The general interest charge, the interest the ATO levies on overdue tax debts, is 11.51% a year for October to December 2026, and it has risen in every quarter of 2026. With self-preparers' tax bills generally due on 21 November and the Tax Ombudsman questioning how the ATO treats people who owe money, the cost of carrying a tax Debt is back in focus.

The 11.51% rate and how it has climbed

The ATO's general interest charge rates page, updated on 4 September 2026, puts the annual rate for the October to December 2026 quarter at 11.51%. The daily rate is 0.03153425%.

That is up from 10.65% in the January to March 2026 quarter. According to the ATO's published figures, the rate moved from 10.65% to 10.96%, then to 11.43%, and then to 11.51%, an increase in each quarter of the year.

Over the year, that is a rise of 0.86 percentage points. On a large or long-running debt, even small quarterly moves add up.

How the general interest charge works

The general interest charge, or GIC, has been part of Australia's tax system for decades. Under the long-standing formula in the tax administration law, it is set each quarter by reference to the 90-day bank accepted bill yield, plus a Margin of seven percentage points.

That link to short-term Money Market rates means GIC tends to move with Interest Rate expectations. The Reserve Bank lifted the cash rate to 4.85% from 3 November 2026, although how that feeds into future GIC rates will depend on bill yields at the time each quarterly rate is set.

GIC is calculated daily and compounds daily. It applies to a range of overdue amounts, including income tax, activity statement debts and certain penalties, from the day the amount was due until it is paid.

GIC is different from the shortfall interest charge, which generally applies when an assessment is amended to increase the tax payable. That charge is set using the same bill Yield but with a smaller margin, three percentage points under the long-standing formula. Once an amended assessment falls due and remains unpaid, however, GIC can apply on top.

For businesses, overdue activity statement debts are a common trigger, because GST and PAYG Withholding amounts can build quickly.

Under legislation passed in 2025, GIC incurred from 1 July 2025 is no longer tax deductible. That removes a cushion businesses previously relied on and makes the headline rate closer to the real after-tax cost.

Hypothetical example: what a $20,000 debt costs

Hypothetical example: a sole trader has a $20,000 tax debt that remains unpaid. Using the ATO's daily rate for the current quarter of 0.03153425%, compounding daily, the GIC over 90 days would be about $575.66.

If the same daily rate applied for a full 365 days, the charge would be about $2,439.31, or roughly 12.2% of the original debt once daily compounding is taken into account.

In practice the rate is reset every quarter, so the actual cost over a year would depend on where GIC moves. The figures also ignore any payments made along the way, which reduce the balance on which interest accrues.

Because GIC is no longer deductible for amounts incurred from 1 July 2025, the full charge would come out of after-tax money.

The Ombudsman's warning on debt and interest

The Tax Ombudsman, Ruth Owen, has raised concerns about the ATO's approach to people who owe tax. "I sometimes see that the way they treat people who are owing tax isn't fair and reasonable," she said.

According to the same report, the ATO was found to have acted reasonably in 63% of debt-related complaints, down nine percentage points. Ms Owen plans to publish trend reports every six months and expects complaints to keep rising for another 12 months.

The Tax Ombudsman's complaints data showed penalties or interest were reduced or remitted in 5% of cases, down from 17%. More than three-quarters of penalty and interest complaints concerned GIC.

The Tax Ombudsman's Complaints Insights Report for April to September 2026 recorded 2,376 complaints, up 74% from 1,362 a year earlier.

Taken together, the figures suggest the ATO is pursuing debts more firmly and granting remission less often. Taxpayers who believe GIC should be remitted generally need to request it and explain why, for example where a delay was outside their control.

Payment options, Credit cards and the 21 November deadline

The ATO says bills for self-preparers are "generally due 21 November". This year 21 November falls on a Saturday. Where a due date falls on a weekend or public holiday, the ATO generally allows payment on the next Business day, which would be Monday 23 November, although taxpayers should confirm the date shown on their notice of assessment.

Credit cards remain an option for now. A joint ministerial release on 9 October said the ATO will keep accepting credit cards until 30 June 2027, an extension from the earlier 30 November 2026 cutoff. After that date, cards can still be used through third-party providers.

The ATO's own credit card page, updated on 15 October, notes that payment plans linked to a credit card will need to be switched to another method.

For taxpayers who cannot pay in full, the ATO offers payment plans. GIC generally continues to accrue on the outstanding balance while a plan is in place, so the 11.51% rate still matters for anyone paying off a debt over time.

What to watch

The next GIC rate, for January to March 2027, is expected to be published before the new quarter starts. Its direction will depend on bill yields after the Reserve Bank's November increase.

Self-preparers' bills are generally due on 21 November, with the weekend timing likely to push the effective date to 23 November.

The Tax Ombudsman's next six-monthly trend report will show whether debt complaints keep climbing as Ms Owen expects.

The mid-year economic and fiscal outlook, due in December, will update the government's Revenue estimates.

Credit card payments directly to the ATO are scheduled to end after 30 June 2027.