How the general interest charge works.
GIC is the ATO's price for unpaid tax. The rate resets every quarter at the 90-day bank bill rate plus a 7% uplift, and it compounds daily, so the debt grows every single day it is unpaid. Since 1 July 2025 the interest is no longer tax deductible, which means a business now needs to earn the interest in pre-tax profit just to stand still.
What the number should tell you.
If the calculator shows the debt clearing inside about two years at a payment your cash flow genuinely supports, a well-prepared ATO payment plan is usually the move. If it shows the debt never clearing, or clearing over many years, the interest is telling you the tool is wrong: small business restructuring compromises eligible debt to what the business can fund, and the two-minute assessment maps which path fits your answers.
Common questions.
What is the ATO general interest charge rate?
The general interest charge (GIC) is set quarterly at the 90-day bank bill rate plus a 7% uplift, and it compounds daily. It has sat above 10% a year in recent quarters. The calculator on this page shows the rate it is using, and the current rate is published on the ATO website.
Is ATO interest tax deductible?
Not any more. GIC and shortfall interest charge stopped being tax deductible from 1 July 2025, which raised the real cost of carrying tax debt for every business. Debt that was tolerable when the interest was deductible often stops making sense after that change.
How does the ATO calculate payment plan instalments?
The ATO does not set your instalment, you propose it, and the ATO accepts proposals it considers credible: lodgments current, instalments the cash flow supports, and the debt cleared in the shortest realistic timeframe, usually within two years. Interest keeps accruing on the balance for the life of the plan.
What if my payment barely covers the interest?
Then the plan is not a plan, it is a treadmill. When the balance cannot realistically clear, eligible companies with total debts under $1 million can use small business restructuring to compromise the debt to what the business can genuinely fund, and the ATO accepts credible restructuring plans routinely.
Is this calculator accurate to the cent?
No, and nothing public can be: your exact GIC depends on the daily rate in each quarter, when payments land, and any remissions. This calculator uses the flat annual rate shown, compounding daily, to give you a fair-sized picture. Your ATO portal shows the exact balance.
The assessment and everything on this site is general information, not financial, legal or insolvency advice. Your result is a guide to how urgent your situation looks, not a formal opinion on solvency. Outcomes depend on your circumstances and no outcome is guaranteed. Formal insolvency appointments are made by registered practitioners we work alongside.