Quick answer
If you lodge your BAS on time but can't pay it, the unpaid amount becomes an ATO debt and the general interest charge starts accruing daily. There's no failure-to-lodge penalty and, for companies, directors keep important protections. The ATO will contact you, and you can usually set up a payment plan. Leave it unpaid and unmanaged and you risk refund offsets, garnishee notices, director penalty notices and credit bureau reporting.
Key points
- Lodging on time with no payment is far better than not lodging: no failure-to-lodge penalty and no director lockdown
- For statements overdue since 1 July 2026, each penalty unit is worth $364; a small business can be charged up to five units per late statement
- Company directors who leave GST or PAYG withholding unreported for three months lose the option of escaping personal liability through administration or liquidation
- You can often reduce the bill itself by varying your PAYG instalment on the statement
- Credit card payments to the ATO stop after 30 November 2026, so plan another way to fund future statements
The September quarter statement is due on 28 October for most businesses that lodge themselves, and this is the week many owners open the figures and realise the money isn’t there. If that’s you, take a breath. An unpaid BAS is one of the most common debts in Australian business, the ATO deals with thousands every quarter, and how the next few weeks play out depends far more on what you do than on the size of the number.
The single most important step costs nothing: lodge the statement on time, even if you pay nothing with it.
Why lodging without paying is the right move
The ATO treats lodging and paying as two separate jobs, and the consequences of missing each are very different.
| Lodged on time, not paid | Not lodged | |
|---|---|---|
| Failure-to-lodge penalty | None | Up to five penalty units for a small business, more for larger ones |
| Interest | General interest charge on the unpaid amount | Interest plus the risk of an ATO estimate of what you owe |
| Director exposure (companies) | Directors keep the option of resolving liability by appointing an administrator or liquidator | After three months, liability for unreported GST and withholding is locked onto directors personally |
| Payment plan | Usually available straight away | Generally not until you lodge |
| Lender’s view | A debt with a clear record | A compliance gap that most lenders want fixed first |
For statements that became overdue on or after 1 July 2026, one Commonwealth penalty unit is $364. A small business is charged one unit for each 28 days a statement is late, up to five units, so a single forgotten quarter can add $1,820 before any tax is counted. Medium and large businesses face multiples of that.
If you use a registered tax agent, quarterly statements lodged electronically usually get extra time; for this quarter that typically means 25 November. The extra time only covers when the statement is due; the amount owing is unchanged.
The timeline once a payment is missed
Here’s roughly what follows an unpaid BAS that’s been lodged. The ATO adjusts its approach to the business’s history, so treat the timing as a guide.
The day after the due date. The general interest charge starts accruing on the unpaid balance, calculated daily and compounding. Since 1 July 2025 none of it can be claimed as a deduction, so every day costs you real after-tax dollars. The ATO debt calculator shows how quickly it adds up.
Weeks one to four. Reminder letters, text messages and emails. If you have refunds due on other accounts, the ATO will generally apply them to the debt instead of paying them to you.
One to two months. A phone call from the ATO’s debt team. This is a conversation, not an ambush; it’s the best moment to agree a plan on your terms.
Around three months. For companies, this is the date that matters most. If the statement still hasn’t been lodged three months after its due date, directors can become personally liable for the GST and PAYG withholding in a way they can no longer escape by placing the company into administration or liquidation. Lodged-but-unpaid amounts don’t trigger that lockdown, which is the whole point of lodging. Our guide to what a director penalty notice means for you explains the rest of that regime.
Three months and beyond, if still unmanaged. Firmer action becomes possible: a garnishee notice to your bank or customers, director penalty notices, and once overdue business tax reaches $100,000 for more than 90 days, reporting to commercial credit bureaus after a 28-day warning.
None of these steps is automatic once you’re engaging. A plan you’re keeping to takes most of them off the table.
Can you make the bill smaller before you pay it?
Before you work out how to fund the full figure, check whether it’s the right figure.
- Vary your PAYG instalment. If this year’s profit is tracking well below last year’s, you can reduce the instalment shown on the statement itself. The ATO can charge interest if you vary too low, so base the new figure on a realistic estimate with your accountant, not on what you can afford.
- Check for missed GST credits. Big purchases, equipment bought on finance and supplier bills paid late in the quarter are easy to miss. Unclaimed credits can generally be picked up on a later statement, but claiming them now reduces this one.
- Look at bad debts. If you account on an accruals basis and a customer won’t pay an invoice you’ve already paid GST on, you may be able to make an adjustment once the debt is written off or has been overdue for 12 months.
Our GST cash flow tips go further on structuring GST so it doesn’t keep landing in one painful lump.
Your options for paying, from cheapest to most expensive
- Pay in part now. Anything you pay today reduces the balance the interest charge runs on. A partial payment plus a plan for the rest is a perfectly normal outcome.
- An ATO payment plan. For business debts up to $200,000 you can usually set one up online or through your agent. Keep every new statement lodged and paid while the plan runs, or it can be cancelled.
- Your bank. If you already have a business overdraft or line of credit, using it for a one-off big quarter is often the cheapest money available. A bank that knows your business is worth a call before anyone else.
- A non-bank working capital loan. Fast, assessed on bank statements, and suited to a business that’s fundamentally sound but caught short. Check the repayment frequency against your next statement date.
- A property-secured loan. For larger or combined ATO debts, or where the bank has said no. Higher setup costs, so it suits bigger numbers. The paying BAS and GST page compares these options in a table.
One change to note: the ATO has announced it will stop accepting credit card payments after 30 November 2026. If paying the BAS on a card was your fallback, that option ends this quarter.
If you’d like a second opinion on which of these fits, send us the BAS amount and we’ll call you.
Example: a monthly lodger who fell two statements behind
This is an illustrative scenario. A Newcastle plumbing company with eight staff lodges monthly. A large commercial job pays 60 days late, and the owner misses two monthly statements while chasing it, intending to “catch up when the money comes in”.
When the accountant reviews the file at the end of the quarter, the first missed statement is approaching three months overdue. Lodging both that week preserves the directors’ position, even though nothing can be paid yet. The combined $38k in GST and withholding goes onto an online payment plan over nine months.
The owner also asks the accountant to vary the PAYG instalment, which was based on an unusually strong prior year. That cuts about $4k from the next statement. Two months later the late client pays, and the owner clears the plan early, stopping the interest charge.
Had the statements stayed unlodged another few weeks, the outcome for the directors would have been far worse, even though the dollars were the same.
Mistakes that turn a small debt into a big one
- Not lodging because you can’t pay. The most expensive mistake on this page.
- Ignoring the ATO’s calls. Engaging early gives you the widest choice of plan terms.
- Agreeing to instalments you can’t sustain. A defaulted plan is harder to replace than one you never set up, and too many defaults close off the online option.
- Funding the BAS with a loan that squeezes the next one. Daily debits that eat the next quarter’s GST simply move the problem along.
- Paying the BAS from money owed to staff super. Super has its own tight deadlines now, and directors can be personally liable for it too.
If statements are already overdue and you need finance, business loans when BAS lodgements are late explains how lenders handle it.
Sorting out this quarter, and the next
An unpaid BAS doesn’t mean the business is in trouble; it usually means cash and timing have drifted apart. We hear from owners in exactly this position every quarter, including those already on a plan or with more than one statement outstanding.
It’s a one-minute form, and no credit check is run when you send it, so your score stays exactly where it is. We won’t scatter your details across the lending market. Instead, someone on our team reads your situation and phones you. Please include the amount owing, which statements are lodged and any ATO letters you’ve had, so the option we bring you first is a realistic one.
Frequently asked questions
Should I lodge my BAS if I can't pay it?
Yes. Lodgement and payment are separate obligations. Lodging on time avoids the failure-to-lodge penalty, keeps your compliance record clean and, for companies, stops the director penalty regime locking in personal liability. The unpaid amount becomes a debt you can then manage with a plan or other funding.
What is the penalty for paying a BAS late?
There's no fixed late-payment penalty. Instead, the general interest charge accrues daily on the unpaid amount and compounds. Since 1 July 2025 that charge has not been tax deductible. Separate penalties apply if the statement isn't lodged on time.
Can I set up a payment plan for my BAS online?
Generally yes, for business debts of $200,000 or less, through Online services for business, through your tax agent or by phone. Larger debts, or businesses that have defaulted on plans repeatedly, will need to speak to the ATO and may be asked for financial details.
Can the ATO take money from my bank account for an unpaid BAS?
Through a garnishee notice, yes. The ATO can require your bank, or people who owe you money, to pay amounts to it instead of you. It usually only does this after other contact has failed, which is another reason to engage early.
Does an unpaid BAS affect my credit score?
Not straight away. The ATO can report a business's tax debt to credit bureaus only when $100,000 or more has been overdue for more than 90 days and the business isn't engaging, and only after a 28-day warning letter.
Can a sole trader be made personally liable for an unpaid BAS?
A sole trader is already personally liable, because the business and the person are the same legal entity. The director penalty regime is aimed at company directors, who would otherwise be protected by the company structure.