So, you find yourself in a situation where you owe money to the ATO and you're wondering how to setup a payment plan. 🤔 No worries, this article will guide you on how to set up a payment plan and it's actually simpler than you think! 😍
Now, here’s a simple guide to get you started:
What is a Payment Plan?
First things first, a payment plan is basically a way to split up your tax owing into smaller and more manageable instalments. ✨ Instead of paying the whole bill at once, you can make smaller payments over a set period of time. You agree with the ATO on an amount that you can afford to pay weekly, fortnightly, or monthly until the debt is paid off over time and with interest. 😎
What should I consider before applying for a Payment Plan?
Before you jump into setting up the payment plan, it's smart to consider a few things:
First off, ask yourself if you can handle paying off your tax bill in one go. ✨ If you can swing it, awesome! That’ll save you some dough on the General Interest Charge (GIC) down the road.
If paying it all at once isn’t doable, figure out how much you can pay now as an initial deposit (the ATO usually wants a 10% upfront payment) and what amount of monthly instalment you can afford. 😊
👉 You can use the ATO's online payment plan estimator, which is a handy tool to help you figure out a payment plan that fits your budget. Plus, it gives you a heads up on how much interest you'll end up shelling out. Remember, the longer you take to pay off the debt, the more interest you'll be charged.
One thing to note: the online payment plan estimator doesn't work for super guarantee charge debts. If you need help with those, give the ATO’s lodge and pay enquiry line a call.
Ready to get started? 😍 Here's how you can set up an ATO Payment Plan Yourself:
👉Apply for an ATO Payment Plan thru myGov
Here's a step by step guide on setting up an ATO Payment Plan thru your active myGov account 👇. Just a heads up, if you owe $200,000 or less, this option should work for you.
Step by Step Guide:
Log in to your myGov account
Select Australian Taxation Office (ATO) from your linked accounts
Select the heading Tax >> Payments >> Payment plans
Click the "Add +" button
Select Account >> Income Tax
Select Amount >> full balance
Select payment method
Then you are ready to set up your payment plan >> frequency and amounts
Just a heads up, the ATO will require a 10% upfront payment within 5 business days.
👉Contacting the ATO for a Payment Plan
If you prefer to talk to a person, you can give a ring to the ATO for your payment plan request. 📞 If you owe over $200,000 or just can't set it up online for some reason, you'll need to reach out to them during their operating hours for a hand. Just make sure you have your Australian business number (ABN) or tax file number (TFN) handy, along with all the details about what you owe. They'll guide you through the process from there.
Here's the ATO phone numbers:
For Individuals - 13 28 65
For Business - 13 72 26
Just a heads up, the ATO will require a 10% upfront payment within 5 business days.
There you have it, you can do the payment plan request to the ATO yourself. Easy peasy! 😍
Please note, once a payment arrangement is in place, the ATO have some payment plan conditions you will need to comply with. These can be found here.