ATO interest (GIC) calculator

How does the ATO calculate interest on tax debts?

The ATO charges the general interest charge (GIC) on overdue tax debts. The rate is set each quarter and is 11.51% a year for October to December 2026. It's calculated daily and compounds daily, so carried for a full year it works out to about 12.2%. On $80,000 of tax debt left unpaid for 12 months, that's roughly $9,760.

Is GIC tax-deductible?

Not any more. From 1 July 2025, GIC and shortfall interest charge are no longer deductible. Interest on a loan used to pay a business tax debt is generally deductible, so the after-tax cost of a loan can be lower than its headline rate suggests. The calculator compares GIC with loan interest after tax at the rate you choose.

How the comparison works

The calculator assumes the full debt stays outstanding for the period, which is the simplest like-for-like comparison. In practice, a payment plan or loan reduces the balance as you pay, so the real interest on both will be lower. Loan fees aren't included, so add them when comparing real offers. Your accountant should confirm the tax treatment for your business.

When does a loan beat the ATO?

For a company paying tax at 25%, a loan's after-tax interest is three-quarters of its rate, so a loan at around 16% a year costs about the same as GIC at current rates before fees. Below that, the loan is usually cheaper on interest alone. Above it, a payment plan is usually cheaper, unless the ATO is moving toward garnishee notices or director penalties, where speed matters more than rate. Read our guide to GIC deductibility and ATO payment plans.

Updating the rate

The GIC rate changes each quarter, usually announced two weeks before the quarter starts. The calculator is pre-filled with the October to December 2026 rate of 11.51%. You can change it to test a different rate.