Late Tax Return Penalties Australia 2026

General information only. Speak with a registered tax or BAS agent for advice.

Failing to lodge your tax return on time in Australia triggers automatic penalties, plus interest on any unpaid tax. Understanding how the penalty system works — and how to minimise it — is important whether you’ve missed the deadline by a week or several years.

The Failure to Lodge Penalty

The ATO applies a Failure to Lodge (FTL) penalty when a tax return, BAS, or other lodgement obligation is not met by the due date. The FTL penalty is calculated in penalty units:

• 1 penalty unit = $330 in 2025–26
• The penalty accrues at 1 penalty unit per 28-day period (or part thereof) that the return is overdue
• The maximum FTL penalty for individuals is 5 penalty units ($1,650)

Overdue period	Penalty units	Penalty amount
Up to 28 days late	1 unit	$330
29–56 days late	2 units	$660
57–84 days late	3 units	$990
85–112 days late	4 units	$1,320
113+ days late	5 units (maximum)	$1,650

The FTL penalty is not linked to the amount of tax you owe. You can have a $0 liability or even be owed a refund and still receive an FTL penalty for not lodging on time.

Default Assessments

If you don’t lodge, the ATO has the power to issue a default assessment — an estimate of your tax liability based on information they hold (employer STP data, bank data, third-party reports). Default assessments are typically higher than actual liabilities because the ATO cannot credit deductions it doesn’t know about.

A default assessment creates a formal tax debt. GIC (General Interest Charge) applies to any unpaid default assessment from the original due date. You can still lodge your actual return to replace the default assessment and reduce the liability — but interest accrued on the default amount is not automatically remitted.

General Interest Charge (GIC)

If there is tax owing (from either a lodged return or default assessment), the General Interest Charge applies from the original due date until the debt is paid. The GIC rate for 2025–26 is approximately 10.65% per annum (set quarterly by the ATO based on the 90-day bank bill rate plus 7 percentage points).

GIC accrues daily and compounds. A $5,000 tax debt left unpaid for 12 months would accrue over $530 in interest. For large debts held over multiple years, GIC can become material.

Unlike the FTL penalty, GIC is not capped — it accrues for as long as the debt remains unpaid.

Remission of Penalties

The ATO has discretion to remit FTL penalties, and frequently does so for:

• First-time late lodgers with otherwise good compliance history
• Taxpayers who lodge voluntarily before any ATO contact
• Cases involving genuine hardship, serious illness, or circumstances outside the taxpayer’s control

The key principle is: voluntary disclosure before ATO contact significantly improves your position. If the ATO contacts you first (via a lodgement reminder, a phone call, or formal compliance action), you lose the benefit of voluntary disclosure.

How to Request Remission

1. Lodge the outstanding return as soon as possible
2. Once the return is processed and an FTL penalty is assessed, contact the ATO (via myGov, by phone on 13 28 61, or through your tax agent)
3. Explain the reason for late lodgement and request remission
4. The ATO will consider your compliance history and the circumstances

The ATO’s remission is not automatic — you must request it. For first-time offenders with a reasonable explanation, full or partial remission is common.

What to Do If You’re Already Late

If you’ve missed the 31 October deadline (self-lodgers) or your agent’s extended deadline, the priority actions are:

1. Lodge immediately — the FTL penalty stops growing once you lodge. Every additional 28-day period adds another penalty unit.
2. Do not wait until you have everything perfect — it is better to lodge with best estimates and amend later than to delay further.
3. Pay any tax owing as soon as possible — this stops GIC from accruing on the unpaid balance. If you can’t pay in full, contact the ATO to set up a payment plan.
4. Contact the ATO or your agent — explain your circumstances before the ATO initiates contact.

Statute of Limitations

The ATO generally has two years from the date of assessment to amend a return for most individuals, and four years for those with more complex affairs (business, trusts, or where the ATO suspects a tax avoidance arrangement). For fraudulent or evasive conduct, there is no time limit.

For very old unfiled returns, the ATO’s enforcement approach varies. For returns more than five years overdue, it is worth engaging a tax agent to manage the conversation with the ATO — they can often negotiate a practical resolution.

Large and Medium Withholders

Different penalty rates apply to large and medium withholders (entities with annual PAYG withholding above certain thresholds). The per-unit penalty is the same, but the maximum number of penalty units is higher (up to 100 units for large entities). This guide focuses on individual taxpayers and small businesses.

Compliance Checklist

• Self-lodgers: deadline is 31 October 2025 for the 2024–25 return
• If you can’t lodge on time, engage a registered tax agent before 31 October to access the extended program
• If you’ve already missed the deadline, lodge as soon as possible — the penalty keeps accumulating
• Always pay any tax owing promptly to stop GIC from accruing
• If you receive an FTL penalty, request remission — especially if this is your first late lodgement

Sources (verified)

• ATO failure to lodge penalty
• ATO general interest charge
• ATO preparing your tax return (individual due date)

Next Steps

• Estimate tax payable via the Tax Return Calculator
• Estimate BAS position via the BAS Calculator