ATO General Interest Charge — What It Is and How to Get It Remitted

What Is the ATO General Interest Charge?

The General Interest Charge (GIC) is interest the ATO charges on unpaid tax debts. It applies to GST, PAYG withholding, income tax, and most other ATO obligations when they are not paid by the due date.

For the 2025–26 income year, the GIC rate is approximately 10.91% per annum — but the critical detail is that it compounds daily. That means you're paying interest on interest, every day the debt sits unpaid.

The ATO recalculates and publishes the GIC rate quarterly. It's set at the 90-day bank bill rate plus 7 percentage points. In practice, the rate has stayed in the 10–12% range in recent years.

How GIC Compounds Daily

To understand why GIC matters, run the numbers. A $20,000 unpaid GST debt at 10.91% annualised compounds as follows:

• After 3 months: approximately $550 in GIC
• After 6 months: approximately $1,110 in GIC
• After 12 months: approximately $2,290 in GIC
• After 2 years: approximately $4,820 in GIC (compounding accelerates the total)

On a $50,000 debt, that's over $10,000 in charges after 18 months — just in interest. The debt keeps growing even while you're trying to manage it.

GIC vs Shortfall Interest Charge (SIC) — The Difference

These two charges are often confused. Here's how they differ:

• GIC — applies when you have an unpaid debt on your ATO account. Most common for overdue BAS, PAYG, or income tax payments.
• Shortfall Interest Charge (SIC) — applies when the ATO amends an assessment and you owe more than you originally declared. The SIC rate is lower (approximately 7.91% for 2025–26) and covers the gap between when the tax was originally due and when the amended assessment is issued.
• Once an amended assessment issues and you still haven't paid, GIC then starts applying on top of the new balance.

SIC is typically dealt with when an ATO audit or review has found an underpayment. GIC is what most small businesses encounter when they simply can't pay on time.

When You Can Apply for Remission

The ATO has discretion to remit GIC — meaning reduce or cancel it — if the circumstances warrant it. Remission is not automatic and is not guaranteed, but it is granted regularly in the right situations.

The ATO's own guidelines identify the following as valid grounds for remission:

• Good prior compliance history — if you've lodged and paid on time for years and this is an isolated issue, the ATO is more sympathetic
• Circumstances outside your control — serious illness, family tragedy, natural disaster, or a situation that genuinely prevented you from meeting your obligations
• ATO delay or error — if the ATO took an unusually long time to process a return or issued incorrect advice that you relied on, GIC that accrued during that period can often be remitted
• Genuine financial hardship — this needs to be substantiated, not just stated. The ATO wants to see you're making genuine efforts to address the debt, not just asking for relief without a plan

Partial remission is common. Full remission is less common but does happen, particularly where there's a clear ATO delay or error involved.

How to Apply for GIC Remission

There are two ways to request remission:

• By phone — call the ATO on 13 28 66. This works for straightforward situations where the grounds are clear. The ATO officer can often grant limited remission on the spot for good compliance history.
• In writing — for larger amounts or more complex circumstances, submit a written request through ATO Online Services (via myGov or the Tax Agent Portal) or by letter. A written request lets you structure the argument properly and creates a record.

Your written request should include:

• Your ABN and tax file number
• The specific debt and period the GIC relates to
• A factual account of why the payment was late
• Your compliance history (lodgement and payment record)
• Any supporting evidence (medical certificates, bank statements, correspondence)
• What you're proposing to do about the underlying debt

What Not to Say

The ATO processes thousands of remission requests. A few things consistently don't work:

• "I just didn't have the money" — not sufficient on its own without demonstrating genuine hardship and a path forward
• Vague future promises without a concrete repayment plan
• Requesting remission while you still have unfiled lodgements — the ATO is far less sympathetic if you haven't kept up with lodgements
• Disputing that the debt exists without evidence — GIC is calculated by the ATO's system; if the underlying debt is correct, the GIC is correct

Get everything lodged before you request remission. The ATO's starting point is: are you trying to comply? Outstanding lodgements signal that you're not.

Partial vs Full Remission

In most cases, the ATO will offer partial remission rather than full remission. For example, if you had a genuine medical issue for three months but the debt has been outstanding for 18 months, expect remission for the period covered by the medical issue — not the full 18 months.

Partial remission is still worth pursuing. On a $30,000 debt, getting six months of GIC remitted could be worth $1,500–$2,000.

How a BAS Agent Can Help

A registered BAS agent dealing with the ATO on your behalf carries more credibility than a self-lodger. The ATO's business portal gives agents direct visibility over your account, making it easier to identify exactly what GIC relates to and build an accurate remission request.

Agents also have direct lines into ATO business teams and can escalate where an initial request is declined. If you have a significant GIC balance and want to formally contest the ATO's position, having a registered agent handle the request is worth the cost.