General interest charge (GIC): how it works and the current rate

The general interest charge (GIC) is the interest the ATO charges when a tax debt isn't paid by its due date. For October to December 2026, the GIC rate is 11.51% a year (0.03153425% a day), and it compounds daily on both the unpaid tax and the interest already charged.

GIC applies to most amounts owed to the ATO, including income tax, GST, PAYG withholding, super guarantee charge and penalties. It is not tax deductible for income years starting on or after 1 July 2025, but in some cases the ATO can remit it, which is where our GIC remission work comes in.

What is the general interest charge?

GIC is set out in Part IIA of the Taxation Administration Act 1953 (TAA), ss 8AAA–8AAH. Part IIA says how the charge is worked out, but you are liable for it only where another provision says so (s 8AAB(2)). Those provisions, listed in s 8AAB(4), cover most taxes and charges the ATO collects.

Each day's GIC is due and payable at the end of that day (TAA s 8AAE), so the charge builds every day the debt stays unpaid.

What interest rate does the ATO charge?

The ATO publishes the GIC rate each quarter. These are the last six quarters' rates, from the ATO's "General interest charge (GIC) rates" page (last updated 4 September 2026).

Quarter	GIC annual rate	GIC daily rate
October–December 2026	11.51%	0.03153425%
July–September 2026	11.43%	0.03131507%
April–June 2026	10.96%	0.03002740%
January–March 2026	10.65%	0.02917808%
October–December 2025	10.61%	0.02906849%
July–September 2025	10.78%	0.02953425%

Because the charge compounds daily, the annual rate understates the cost: at 11.51%, a debt left unpaid for a full year attracts interest of about 12.2% of the original amount.

How is GIC calculated?

The rate: base interest rate plus 7 percentage points

The GIC rate for a day is the base interest rate for that day plus 7 percentage points, divided by the number of days in the calendar year, so by 366 in a leap year (TAA s 8AAD(1)).

The base interest rate is the monthly average yield of 90-day Bank Accepted Bills published by the Reserve Bank of Australia for a set month before each quarter: the preceding November for January to March, February for April to June, May for July to September and August for October to December (s 8AAD(2)).

The base rate is rounded to two decimal places (s 8AAD(4)). For October to December 2026, the 11.51% GIC rate reflects a base interest rate of 4.51%.

Daily compounding

Each day's charge is the daily rate multiplied by the unpaid original amount plus any unpaid GIC from earlier days (s 8AAC(3)). In other words, you pay interest on interest.

Where your tax debts are kept in a running balance account, as activity statement amounts usually are, GIC is worked out on the account's debit balance at the end of each day and added to that balance, so it compounds the same way (s 8AAC(2), s 8AAZF).

How much interest does the ATO charge on a $50,000 debt?

For example, suppose a business owes $50,000 and pays nothing. For simplicity, assume the rate stays at 11.51% throughout (in practice it changes each quarter).

Time unpaid	GIC (approx.)	Total owing (approx.)
1 day	$15.77	$50,015.77
3 months (91 days)	$1,460	$51,460
6 months (182 days)	$2,950	$52,950
12 months	$6,100	$56,100
2 years	$12,940	$62,940

Simple interest at 11.51% for a year would be $5,755, so daily compounding adds about $340 in the first year, and more each year after that.

Because GIC is no longer deductible, the full $6,100 is a real after-tax cost.

When does GIC apply?

GIC most commonly applies to:

• Unpaid income tax (Income Tax Assessment Act 1997 (ITAA 1997) s 5-15).
• Activity statement amounts such as GST, PAYG withholding and PAYG instalments, usually through the running balance account (TAA s 8AAZF; Sch 1 ss 16-80, 45-80 and 105-80).
• Fringe benefits tax (Fringe Benefits Tax Assessment Act 1986 s 93, listed in TAA s 8AAB(4)).
• Super guarantee charge (Superannuation Guarantee (Administration) Act 1992 s 49, listed in TAA s 8AAB(4)).
• Unpaid administrative penalties, from the penalty's due date (TAA Sch 1 s 298-25).
• Unpaid shortfall interest charge (ITAA 1997 s 5-15).
• Unpaid ATO estimates, other than super guarantee estimates, once they remain unpaid 7 days after the notice, backdated to when the underlying amount was due (TAA Sch 1 s 268-75).

In each case, GIC runs from the day the amount was due until both the amount and the GIC on it are paid (for example, ITAA 1997 s 5-15). If you pay the tax but not the interest, GIC keeps running on the interest.

GIC runs from the due date, not the assessment date

For income tax, GIC is calculated from when the tax was due and payable, not from when the ATO issued the assessment, which matters most when a return is lodged late (ITAA 1997 s 5-5(3) and note).

• Individuals and most trusts. Tax on an original assessment is generally due 21 days after the day the return had to be lodged (s 5-5(5)). If you lodge on or before that day and the notice of assessment is given after it, the tax is due 21 days after the notice is given (s 5-5(6)).
• Companies and super funds. As self-assessment entities, their due date is fixed by reference to the end of the income year, not the assessment: generally the first day of the sixth month after the year ends, which is 1 December for a 30 June year end (s 5-5(4)).
• Deferrals. If the ATO defers the due date, by written notice to you or by a notice on its website for a class of taxpayers, GIC runs from the deferred date (TAA Sch 1 s 255-10).

The ATO's own example: an individual lodges their 2023 return late, on 1 July 2024, and the notice of assessment issues on 21 July 2024. GIC applies from 21 November 2023, the legislated due date (PS LA 2011/12, para 66).

How is GIC different from shortfall interest charge?

	General interest charge (GIC)	Shortfall interest charge (SIC)
When it applies	An amount is unpaid after its due date	The ATO amends an assessment and more tax is payable
Period	From the due date until paid	From the original due date to the day before the amended assessment notice (TAA Sch 1 s 280-100)
Rate	Base interest rate plus 7 percentage points (s 8AAD)	Base interest rate plus 3 percentage points (Sch 1 s 280-105)
October–December 2026	11.51% a year	7.51% a year
Power to remit	s 8AAG, three grounds for late payment	Sch 1 s 280-160, where fair and reasonable

The SIC rate is from the ATO's "Shortfall interest charge (SIC) rates" page (last updated 4 September 2026). After an amendment, the extra tax is due 21 days after notice of the amended assessment and the SIC 21 days after notice of the charge, and GIC runs on anything left unpaid after that (ITAA 1997 ss 5-5(7), 5-10 and 5-15). See our guide to shortfall interest charge and how to get it remitted.

One exception: the GIC rate on unpaid Division 296 tax, the additional tax linked to large superannuation balances, is the base interest rate plus 3 percentage points, not 7 (TAA s 8AAD(1A) and s 8AAC(2A)).

Is GIC tax deductible?

No, for income years starting on or after 1 July 2025. The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025 repealed the old deduction for GIC and SIC and added a rule that you can't deduct either charge (ITAA 1997 s 26-5(1A); Sch 2 to the amending Act, with item 4 setting the start date). For most taxpayers, that means interest incurred from the 2025–26 income year.

On the ATO's view, you incur GIC only when you actually become liable for it. So backdated GIC on a late-lodged return is incurred when the notice of assessment is given, not on the earlier days it accrued (PS LA 2011/12, paras 62, 66 and 69). For a return assessed now, that backdated interest generally isn't deductible. Our guide on ATO interest no longer being tax deductible covers the detail.

Can you stop GIC running?

GIC generally keeps accruing until everything is paid (see, for example, ITAA 1997 s 5-15(b)), unless the debt is reduced, for example by an amended assessment, or the interest is remitted. Short of paying in full:

• Pay what you can. Every payment reduces the balance the charge is worked out on from then on.
• A payment plan doesn't stop it. An instalment arrangement doesn't change the date the debt was due, so GIC keeps accruing on the unpaid balance (TAA Sch 1 s 255-15(2)). See does the ATO charge interest on payment plans? and our guide to ATO payment arrangements.
• A deferral changes the start date. If the ATO agrees in writing to defer the due date, GIC starts from the new date (Sch 1 s 255-10). Ask before the due date passes where you can.

Can GIC be remitted?

The Commissioner can remit all or part of the GIC a person owes (TAA s 8AAG(1)). Where the GIC arose because an amount was paid late, the ATO must be satisfied of one of three grounds (s 8AAG(2)–(5)). In short: either the circumstances behind the delay weren't caused by you, or they were but remission is fair and reasonable, and in both cases you took reasonable action to mitigate them; or there are special circumstances, or remission is otherwise appropriate. Our GIC remission page explains each ground and what the ATO looks for.

The ATO's example of special circumstances is a taxpayer with a consistently good payment record who pays late on an isolated occasion (PS LA 2011/12, para 27). Most requests turn on evidence of what caused the delay and what you did about it.

There is no right to object under the taxation law to a GIC remission decision, although judicial review is available (PS LA 2006/8, para 141). You can make a further request with better evidence, but it is better to get the first one right. Our guides on how to ask the ATO to remit interest and what to do if interest remission is refused cover the process.

Other ATO interest rates

The Division 7A benchmark interest rate is often confused with GIC, but it is not a charge on tax debts. It is the minimum rate a private company loan to a shareholder or associate generally needs to carry if it is not to be treated as a dividend (Income Tax Assessment Act 1936 s 109N).

The ATO can also owe you interest. If it is late paying certain refunds, interest may be payable under the Taxation (Interest on Overpayments and Early Payments) Act 1983 (see the note to TAA s 8AAZLG(2)).

Next step

Send us your ATO statements of account showing the GIC, the notices for the underlying debts, and a short note on when and why the debt fell behind and what you did about it. If you are on a payment plan or have already asked for remission, include the ATO's letters. In a first call we'll check how the interest has been worked out and whether there are grounds to ask for remission.