# Got a Tax Bill You Can't Pay? Your Next Steps in Australia

> What to do when your notice of assessment shows a tax bill you can't pay: check the due date, set up an ATO payment plan and find free help if it's too much.

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- Author: Marnix
- Published: 2026-10-24



You lodged your return expecting a small refund, or at least nothing to pay. Then the notice lands in your myGov inbox with an amount owing and a date a few weeks away, and that money isn't sitting anywhere.

A bill like this means the tax already paid didn't cover the year's assessment. That can happen across two jobs or with a student loan your payroll didn't know about. It isn't a sign you did anything wrong, and there's a way through it that doesn't involve finding the whole amount by next month.

## Start with the notice

Your **notice of assessment** is the ATO's result for your return: your taxable income, the tax on it, the tax already withheld from your pays and what's left to pay or refund. The amount due and its date can be on the notice itself or on a separate **statement of account**, which also shows any interest or other amounts on your account.

For a self-lodged return, the usual payment date is 21 November. An assessment issued after 31 October can have a 21-day payment period, but lodging late doesn't automatically reset the payment date. A tax agent's return can have a different date. Use the date on your notice and ask the ATO if it's unclear.

If a figure looks wrong, such as income you don't recognise or withholding that's missing, compare it with the return you lodged and contact the ATO or your tax agent. An amendment may fix it. Raising a question doesn't move the due date unless the ATO agrees to, so ask straight away.

## Work out what each pay can spare

Before contacting anyone, work out what each pay could put towards the bill once rent, food, transport and the bills already due are covered. The ATO will ask what you can afford, and a smaller amount you can keep is worth more than a bigger one that leaves the fridge empty.

Our guide to [money left before payday](/blog/money-left-before-payday) walks through finding that number. Clova shows what's left until payday with the bills due before then already counted, which is the figure this decision needs.

| What you can pay by the due date | Your next step |
| --- | --- |
| All of it | Pay it in full |
| Some now, the rest over time | Set up a payment plan online, or call the ATO |
| Nothing without going short on essentials | Call the ATO on 13 11 42 and a free counsellor on 1800 007 007 |

## Set up a payment plan before the due date

A **payment plan** is an agreement with the ATO to pay the bill in instalments, weekly, fortnightly or monthly, until it's cleared. For a debt under $200,000 you can usually set one up yourself: sign in to myGov, open the ATO's online services and choose Tax, then Payments, then Payment plans. The ATO may ask why you can't pay now and about your income, spending and savings. Its estimator then suggests an upfront amount and instalments, which you can adjust within limits.

Call the ATO on **13 11 42** instead if setting it up online doesn't work, you need longer than two years or you're in serious hardship. Before the due date is best. If it has already passed, call anyway.

Say, as a made-up example, your notice shows $1,200 owing and your pays can spare $100 a fortnight.

| When | Left to pay (AUD) |
| --- | ---: |
| Now | $1,200 |
| After 6 fortnightly pays (12 weeks) | $600 |
| After 12 fortnightly pays (24 weeks) | $0 |

Before interest: at 11.51% a year (October to December 2026), $1,200 owing adds about 38c a day.

Interest, called the **general interest charge**, starts on whatever is unpaid after the due date and keeps adding daily while you're on a plan. At $100 a pay, that stretches the plan a little past twelve payments, and paying extra when a pay allows shortens it.

A plan also needs your [future returns lodged on time](/blog/tax-return-deadline) and any new tax bill paid in full or put on its own plan. Otherwise it can default and the whole balance becomes due at once. If an instalment stops being affordable, tell the ATO before you miss it.

## If paying anything means going without

Sometimes there's no amount left after rent and food. The ATO calls this **serious hardship**: not being able to afford basics like food, housing, clothing, medical care or education for yourself or people who depend on you. Tell them when you call, because they can tailor support to your situation.

In some cases the ATO can release you from some or all of an eligible tax debt, which means it's cancelled rather than paid. It looks at your income, spending, assets and debts first. You'd need any outstanding returns lodged before applying, and hardship alone doesn't guarantee a release. The [ATO's tax support page](https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/tax-support-for-individuals-businesses-not-for-profits-and-tax-professionals) has a debt release tool that checks whether you can apply.

You don't have to work this out alone. The National Debt Helpline on **1800 007 007** offers free, confidential financial counselling, and a counsellor can help you work out what's affordable with your other bills in the picture too.

## Give each instalment a place in your pays

Once the plan is agreed, each instalment is a bill like rent, with a date and an amount. Line those dates up with your paydays so every instalment comes from a pay that has already landed. If you pay by BPAY, use biller code 75556 with the payment reference number from your notice, and allow up to four business days for it to reach the ATO.

Clova plans each pay into allocations, so the instalment gets its own amount beside rent and groceries.

Clova is an Australian budgeting app. Join the waitlist and we’ll be in touch. [Join the waitlist](https://getclova.com/)

## Make next year's return come out closer

Your notice can show why this year ended in a bill. If two jobs both claim the tax-free threshold, each withholds as if it were your only income; our guide to [take-home pay](/blog/take-home-pay) shows how that adds up. For a HELP debt, check each employer knows about it through your withholding declaration.

You can also ask an employer to take out more tax from each pay, called an upward variation. If they agree, it's set out in writing between you. For income with no tax taken out, such as side work, putting part of each payment aside works like any [known future bill](/blog/sinking-funds).

By the time this plan is finished, those changes will have had months to work on the next return.

## A note from us

A tax bill is easier to face when part of it was put away before the notice arrived. Clova asks where leftover money goes after each pay, so a lighter fortnight can start next year's tax money.

## Common questions

### What if the due date falls on a weekend?

You can pay on the next business day. In 2026, 21 November is a Saturday, so a bill due that day can be paid on Monday 23 November. The date on your own notice still comes first.

### Can the ATO remove the interest?

You can ask for some or all of the interest to be remitted. It's a separate request from a payment plan and isn't automatic. Interest charged from 1 July 2025 can't be claimed as a tax deduction.

### Is my HELP repayment part of the bill?

It can be. The ATO works out your compulsory HELP repayment on your notice of assessment, so too little withheld during the year shows up in the amount owing. If paying it would leave you in hardship, you can apply to defer that year's repayment. Deferring doesn't cancel the loan.

### Will my next tax refund pay off the plan?

A refund or credit goes towards the debt, but it doesn't replace your instalments, so keep paying as agreed. A refund can also go to other government debts first, such as a family assistance or child support debt.

## Sources

1. [Your notice of assessment](https://www.ato.gov.au/individuals-and-families/your-tax-return/your-notice-of-assessment) · Australian Taxation Office
2. [Preparing your tax return](https://www.ato.gov.au/individuals-and-families/your-tax-return/before-you-prepare-your-tax-return/preparing-your-tax-return) · Australian Taxation Office
3. [Due dates falling on a weekend or public holiday](https://www.ato.gov.au/api/public/content/0-bb1ec3d7-b642-4f98-9ca3-c66f79ecc38d) · Australian Taxation Office
4. [If you don't pay](https://www.ato.gov.au/individuals-and-families/paying-the-ato/if-you-don-t-pay) · Australian Taxation Office
5. [Payment plans](https://www.ato.gov.au/individuals-and-families/paying-the-ato/help-with-paying/payment-plans) · Australian Taxation Office
6. [Setting up a payment plan](https://www.ato.gov.au/individuals-and-families/paying-the-ato/help-with-paying/payment-plans/setting-up-a-payment-plan) · Australian Taxation Office
7. [General interest charge rates](https://www.ato.gov.au/tax-rates-and-codes/general-interest-charge-rates) · Australian Taxation Office
8. [Managing payments](https://www.ato.gov.au/individuals-and-families/paying-the-ato/help-with-paying/managing-payments) · Australian Taxation Office
9. [Personal crisis or financial hardship](https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/personal-crisis-or-financial-hardship) · Australian Taxation Office
10. [Tax support for individuals, businesses, not-for-profits and tax professionals](https://www.ato.gov.au/individuals-and-families/financial-difficulties-and-disasters/tax-support-for-individuals-businesses-not-for-profits-and-tax-professionals) · Australian Taxation Office
11. [Pay with BPAY](https://www.ato.gov.au/individuals-and-families/paying-the-ato/how-to-pay/pay-with-bpay) · Australian Taxation Office
12. [Why you may receive a tax bill](https://www.ato.gov.au/individuals-and-families/your-tax-return/your-notice-of-assessment/why-you-may-receive-a-tax-bill) · Australian Taxation Office
13. [PAYG withholding variations](https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/payg-withholding/payments-you-need-to-withhold-from/payments-to-employees/variations) · Australian Taxation Office
14. [Compulsory repayments](https://www.ato.gov.au/individuals-and-families/study-and-training-support-loans/compulsory-repayments) · Australian Taxation Office
15. [How we recover debts at tax time](https://www.servicesaustralia.gov.au/how-we-recover-debts-tax-time) · Services Australia
16. [Tax debts](https://ndh.org.au/debt-problems/tax-debts/) · National Debt Helpline
17. [Financial counselling](https://moneysmart.gov.au/managing-debt/financial-counselling) · ASIC Moneysmart

## Related reading

- [How much money do you have left before payday?](https://getclova.com/blog/money-left-before-payday)
- [How HECS-HELP debt works in 2026](https://getclova.com/blog/hecs-debt)
- [Sinking funds: how to save for the bills that come once a year](https://getclova.com/blog/sinking-funds)

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