ATO GIC Calculator (General Interest Charge)

Calculate how much General Interest Charge (GIC) the ATO will add to your overdue tax debt. GIC compounds daily using quarterly rates set by the ATO.

The current ATO GIC rate for February 2026 is 10.65% per annum (Q3 2025-26), compounded daily.

Related tools: BAS Calculator for activity statement amounts, PAYG Calculator for withholding, and GST Calculator for GST-only checks.

What is the General Interest Charge (GIC)?

The General Interest Charge (GIC) is an interest charge the ATO applies when you have an outstanding tax liability that is overdue. It is imposed under section 8AAD of the Taxation Administration Act 1953 and applies to late or unpaid amounts of income tax, GST, PAYG instalments, and most other tax obligations.

GIC starts accruing from the day after the due date for payment and is applied on a daily compounding basis. This means the charge is calculated each day on the total outstanding amount, including any GIC that has already accrued. Because it compounds, the longer a debt remains unpaid, the faster the interest grows.

The ATO applies GIC automatically. You do not need to calculate it yourself, but understanding how it works helps you estimate the cost of carrying a tax debt and make informed decisions about payment timing.

Current ATO GIC rate for February 2026

If your main question is simply "what is the current ATO GIC rate", the short answer is 10.65% per annum for February 2026. Because GIC compounds daily, the practical cost depends on both the size of the debt and how long it stays unpaid. The calculator above turns that rate into a real dollar figure.

Current ATO GIC Rate (Including February 2026)

The GIC rate is determined quarterly by a formula: the 90-day bank accepted bill rate (set by the Reserve Bank of Australia) plus 7 percentage points. This makes GIC significantly higher than typical commercial interest rates.

The formula for determining each quarter's rate is:

How GIC is Calculated

GIC is calculated using daily compounding. This is more expensive than simple interest because each day's charge is added to the balance, and the next day's charge is calculated on the new, higher balance.

The calculation works as follows:

1. Determine the daily rate: Divide the applicable annual GIC rate by the number of days in the year (365 or 366 for a leap year).
2. Calculate each day's GIC: Multiply the outstanding balance (original debt plus all previously accrued GIC) by the daily rate.
3. Add the day's GIC to the running total: The new balance becomes the basis for the next day's calculation.
4. Repeat for each day until the debt is paid in full.

Worked Example

Suppose you owe $10,000 in overdue tax, and the annual GIC rate is 10.65% (daily rate: 0.02917808%).

After one full year at 10.65%, a $10,000 debt accumulates approximately $1,124 in GIC due to daily compounding. With simple interest, it would only be $1,065. The compounding effect becomes more significant with larger debts and longer periods.

GIC is No Longer Tax-Deductible

From 1 July 2025, GIC is no longer tax-deductible. This is a significant change. Previously, taxpayers could claim GIC as a deduction under section 8-1 of the Income Tax Assessment Act 1997, which reduced the effective cost of carrying a tax debt.

The new rule applies to all GIC incurred from 1 July 2025, regardless of when the underlying tax debt arose. This means:

• GIC incurred before 1 July 2025 remains deductible in the year it was incurred
• GIC incurred from 1 July 2025 onward is not deductible, even if the tax debt existed before that date
• The change also applies to Shortfall Interest Charge (SIC)

Tax tip: With GIC no longer deductible, the true cost of an overdue tax debt is now even higher. If you have an outstanding tax liability, paying it off should be a priority. Consider whether it makes sense to use savings or even borrow at a lower commercial rate to clear the ATO debt.

How to Reduce or Remit GIC

While GIC accrues automatically, there are several strategies to manage it:

1. Pay the Debt as Soon as Possible

The most effective way to stop GIC is to pay the full amount. Even partial payments reduce the balance on which GIC is calculated. Prioritise paying your tax debt over lower-interest obligations since GIC at ~10.65% is higher than most commercial rates.

2. Request a Payment Plan

You can set up a payment plan with the ATO online through myGov or by calling the ATO. A payment plan does not stop GIC from accruing, but it prevents the ATO from taking more serious collection action. The ATO may also be more willing to consider GIC remission if you are on a payment plan and meeting your obligations.

3. Apply for GIC Remission

The ATO has discretion to remit (reduce or cancel) GIC under section 8AAG of the Taxation Administration Act 1953. You may qualify for remission if:

• Extraordinary circumstances beyond your control prevented timely payment (e.g., serious illness, natural disaster, death in the family)
• The ATO contributed to a delay in issuing an assessment or processing your return
• You relied on incorrect advice from the ATO
• It would be fair and reasonable in the circumstances

To apply, lodge a request through myGov, call the ATO, or have your tax agent submit a remission request on your behalf.

4. Lodge on Time, Even if You Cannot Pay

Always lodge your tax return and activity statements on time, even if you cannot pay the full amount. Late lodgement can result in additional penalties on top of GIC. Lodging on time but paying late only attracts GIC, not a failure-to-lodge penalty.

GIC vs Shortfall Interest Charge (SIC)

The ATO imposes two types of interest charges, and they apply in different situations:

SIC applies when the ATO amends your assessment and you owe additional tax. It is charged from the original due date of the assessment to the date of the amended assessment. After the amended assessment issues, if you do not pay the shortfall amount by the new due date, GIC then applies to the unpaid amount.

Because SIC uses a lower rate (+3% instead of +7%), it is less punitive than GIC. However, SIC can apply for long periods if the ATO takes several years to amend an assessment.

FAQ

What is the current ATO GIC rate?

The current GIC rate for Q3 2025-26 (January to March 2026) is 10.65% per annum, which equals a daily rate of 0.02917808%. The GIC rate is updated quarterly based on the 90-day bank accepted bill rate plus a 7 percentage point uplift.

How is GIC calculated?

GIC is calculated on a daily compounding basis. Each day, the GIC charge equals the total outstanding amount (original debt plus any accumulated GIC) multiplied by the applicable daily rate. The daily rate is the annual rate divided by the number of days in the year. This means you pay interest on interest, making it more expensive than simple interest.

Can I claim GIC as a tax deduction?

No. From 1 July 2025, GIC is no longer tax-deductible. This change applies to all GIC incurred from that date, regardless of when the underlying tax debt arose. Previously, GIC was deductible under section 8-1 of the ITAA 1997.

How do I stop GIC from accruing?

The only way to stop GIC from accruing is to pay the outstanding tax debt in full. Setting up a payment plan with the ATO does not stop GIC — it continues to accrue on the unpaid balance. However, paying as much as you can as soon as possible will reduce the balance on which GIC is calculated.

Can the ATO remit (cancel) GIC?

Yes, the ATO can remit (reduce or cancel) GIC in certain circumstances. You can apply for GIC remission if you experienced extraordinary circumstances beyond your control (such as serious illness or natural disaster), if the ATO contributed to a delay, or if it would be fair and reasonable to do so. The ATO considers each case on its merits.

What is the difference between GIC and SIC?

GIC (General Interest Charge) applies to late or unpaid tax and is calculated at the base rate plus 7 percentage points. SIC (Shortfall Interest Charge) applies to shortfall amounts from amended assessments and is calculated at a lower rate — the base rate plus 3 percentage points. SIC is intended to compensate the government for the time value of underpaid tax, while GIC also includes a penalty element.