A late BAS attracts a failure-to-lodge penalty of $330 per 28 days (small entity) up to $1,650 maximum, plus the ATO’s General Interest Charge at 10.96% p.a. on unpaid GST and PAYG. The ATO can remit penalties, but since January 2026 all remission requests require formal written applications. Getting your BAS lodged on time through a registered tax agent is the most effective protection.
The ATO issued over 180,000 failure-to-lodge penalties in 2023, collecting approximately $95 million. For many Australian business owners, late BAS lodgement is one of the most costly compliance mistakes, yet many don’t realise how quickly penalties and interest compound. This guide breaks down exactly what happens when a BAS is lodged late, how much it costs, and what you can do about it.
The ATO imposes a failure-to-lodge penalty under section 286-75 of Schedule 1 to the Taxation Administration Act 1953. For the 2025-26 financial year, the penalty is one penalty unit ($330) for each 28-day period the BAS remains outstanding, up to a maximum of five units ($1,650) for small entities.
The penalty increases based on your turnover. Small entities (under $1 million turnover) face lower penalties than larger organisations. Additional periods of non-lodgement trigger additional penalty units, compounding the exposure.
| Entity Size | Annual Turnover | Per 28 Days | Maximum |
|---|---|---|---|
| Small | Under $1 million | $330 | $1,650 |
| Medium | $1 million to $20 million | $660 | $3,300 |
| Large | Over $20 million | $1,650 | $8,250 |
Source: ATO Penalty Units and Taxation Administration Act 1953
For help understanding your obligations, we recommend our small business tax compliance services. Our team can also walk you through the ATO due dates guide to keep you on track.
The General Interest Charge is calculated daily on a compounding basis using the 90-day bank bill rate plus 7 percentage points. For the quarter beginning 1 April 2026, the GIC annual rate is 10.96%, equating to approximately 0.03% per day. The charge applies from the day after the amount was due until it is paid in full.
GIC compounds daily, which means interest accrues on interest. For a small business with a $50,000 GST liability 90 days overdue, the GIC alone would total approximately $1,350. Unlike the failure-to-lodge penalty which caps out after five 28-day periods, GIC accumulates indefinitely until the debt is paid.
The current rate of 10.96% p.a. is significantly higher than most commercial lending rates. This makes prompt lodgement and payment one of the most economical decisions a business owner can make. Learn more about our BAS and IAS lodgement services.
The ATO’s enforcement escalates in stages: failure-to-lodge penalty, General Interest Charge accrual, formal demand notices, garnishee orders against bank accounts, director penalty notices (DPNs) under Division 269 of Schedule 1 to the TAA 1953, and prosecution in serious cases. Directors can become personally liable for unpaid GST and PAYG withholding.
A lockdown DPN is issued when a BAS is 3 or more months overdue. Once issued, a director cannot escape this liability through voluntary administration or liquidation. The personal exposure extends beyond the business entity, making immediate action critical.
If you are facing enforcement action, contact us immediately. We help businesses navigate business tax services and can work with the ATO to develop a path forward.
The Commissioner has discretion to remit failure-to-lodge penalties under section 298-20 of Schedule 1 to the TAA 1953, and to remit General Interest Charge under section 8AAG of the TAA 1953. Since January 2026, all remission requests must be submitted as formal written applications supported by evidence, citing grounds set out in Practice Statements PS LA 2011/12 and PS LA 2006/8.
The ATO considers four main grounds for remission: circumstances beyond the taxpayer’s control (natural disaster, serious illness), ATO delay or error, good compliance history, and disproportionate penalties. During 2020-2022, the ATO was lenient with remissions. Since then, it has progressively tightened its approach. From January 2026, verbal requests are no longer accepted, and all applications must be in writing.
Source: PS LA 2011/12 and ATO Remission of Interest Charges
Our CPA team helps Melbourne business owners navigate ATO penalties, prepare remission applications, and get lodgements back on track.
Contact Us TodayIn our experience advising commercial property clients, late BAS lodgement is one of the most expensive compliance failures we encounter. A Melbourne-based commercial property client (with warehouses and rental properties) came to 42 Advisory after their previous accountant had allowed multiple BAS lodgements to fall overdue. The accumulated failure-to-lodge penalties and General Interest Charge on unpaid GST totalled approximately $80,000.
We prepared a formal written remission application and secured partial remission of the interest component. However, the experience highlighted two critical realities: first, the penalties and GIC had accumulated to nearly the value of a quarterly GST liability; and second, the ATO’s current approach to remission is materially stricter than during the COVID period. From January 2026, all remission applications must be submitted in writing with supporting evidence.
The lesson is straightforward: proactive lodgement management through a dedicated tax agent would have avoided the entire $80,000 exposure. Learn more about our CPA accountant in Melbourne services.
A registered tax agent provides automatic lodgement deadline extensions of up to four weeks for quarterly BAS, proactive lodgement management to prevent penalties, and the expertise to prepare formal remission applications where penalties have already been imposed. Tax agents are bound by the TPB Code of Conduct to act in your best interests.
The tax agent extension dates provide breathing room on three of four quarters. Q2 (October to December) due on 28 February receives no extension, so that deadline requires particular attention.
| Quarter | Normal Due Date | Tax Agent Extension |
|---|---|---|
| Q1 (Jul-Sep) | 28 October | 25 November |
| Q2 (Oct-Dec) | 28 February | No extension |
| Q3 (Jan-Mar) | 28 April | 26 May |
| Q4 (Apr-Jun) | 28 July | 25 August |
If your accountant missed the deadline, you are the one wearing the penalty. At 42 Advisory, every client has a dedicated team and partner access. Your BAS is never an afterthought. Explore our BAS lodgement services and our FBT return guide.
Late BAS lodgement carries significant financial and personal risk. The failure-to-lodge penalty ranges from $330 to $1,650 per BAS for small entities, while General Interest Charge compounds daily at 10.96% p.a. The ATO’s enforcement escalates rapidly, potentially leading to director penalty notices and garnishee orders. Remission is possible but requires formal written application since January 2026. A registered tax agent provides automatic extensions, proactive management, and expertise in remission applications. The most effective protection is lodging on time, every time.
Our Melbourne-based CPA team can review your BAS lodgement history, identify any outstanding obligations, and help you get back on track.
Schedule a MeetingDisclaimer: The information provided in this article is general in nature and does not constitute specific tax, legal, or financial advice. We recommend seeking professional advice tailored to your individual circumstances. 42 Advisory is a CPA firm and Registered Tax Agent.
For a small entity (turnover under $1 million), the maximum failure-to-lodge penalty is $1,650 (five penalty units at $330 each). Medium entities face up to $3,300 and large entities up to $8,250. These penalties apply per overdue BAS, so multiple late lodgements compound the total exposure.
The ATO typically issues an FTL penalty after the lodgement is 28 days overdue. Additional penalty units accrue for each subsequent 28-day period, up to a maximum of five periods. The penalty notice is usually sent by letter or through the ATO’s online portal.
GIC incurred on business-related tax debts (such as GST shortfalls) is generally tax deductible under section 8-1 of the ITAA 1997. However, proposed legislative changes may remove this deductibility for income years beginning on or after 1 July 2025. We recommend checking the current position with your tax adviser.
Yes. The ATO offers payment plans for outstanding tax debts, including penalties and GIC. However, GIC continues to accrue on the unpaid balance during the payment plan. Entering a payment plan does not stop interest from compounding.
No. The Q2 (October to December) quarterly BAS due on 28 February does not receive a tax agent extension. Q1, Q3, and Q4 typically receive an automatic four-week extension when lodged through a registered tax agent.