Free tool
ATO payment plan vs loan: compare the real cost
Estimate the interest an ATO payment plan would cost, and set it beside the total cost of a loan quote you hold — plus the factors that numbers alone don't show.
How the estimate works
The ATO's general interest charge is worked out daily on a compounding basis, and the ATO resets the rate each quarter. The calculator converts the annual rate you enter into a daily rate, compounds it to a monthly equivalent, and works out the equal monthly instalment that would clear your debt over the plan length you chose. The estimated GIC is the total of those instalments minus the original debt.
On the loan side, you enter the total cost of finance from a written quote — everything you'd pay above the amount borrowed, including fees. We don't fill in or suggest any rate, because every loan is priced on the business's own situation.
What the numbers don't capture
| Factor | ATO plan | Loan |
|---|---|---|
| Tax treatment | GIC from 1 July 2025 not deductible | Interest may be deductible — ask your accountant |
| Director penalties | Not remitted by a plan | Remitted when the company liability is paid in full |
| Missed payment | Default; whole overdue balance due; firmer action possible | Lender's arrears process under the contract |
| Credit reporting | Not disclosed while you comply | Removed once the ATO is paid |
| Rate changes | GIC reset quarterly | As set out in the loan contract |
If the plan is clearly cheaper and you can meet it alongside every new BAS, it's probably the right choice — and we'd tell you so. If a director penalty, garnishee notice or defaulted plan is in the picture, the non-financial rows may matter more than the totals. Our side-by-side guide goes deeper, and if a loan looks sensible you can see if you qualify with no credit check.
Frequently asked questions
Why do I have to enter the GIC rate myself?
The ATO resets the general interest charge every quarter and publishes the current figure on its GIC rates page. Entering it yourself means the comparison always uses the rate that applies when you use the tool — and we never publish rates on this site.
Where do I get the loan's total cost?
From a written quote. Ask the lender for the total of all repayments and fees over the term. Enter the total cost of finance — the amount you'll pay above what you borrow.
Does the tool account for tax deductions?
No — it shows pre-tax figures and flags the difference. GIC incurred from 1 July 2025 isn't deductible; loan interest may be. Ask your accountant how each would be treated for you.
Is the plan estimate exact?
It's an estimate. It assumes equal monthly instalments, a constant GIC rate and daily compounding. Real plans may differ, and the ATO's rate changes each quarter.
Want a real quote to compare?
Tell us the ATO balance and your situation. We'll set out the total cost in writing so you can compare it honestly with the ATO plan. No credit check to enquire.
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