Can I still pay my ATO debt by credit card in 2026?

Short answer: if your business has an ATO debt, two changes landing close together have made it dearer and less flexible to carry. The ATO stops taking credit cards after 30 November 2026, and ATO interest has not been tax deductible since 1 July 2025. That is genuinely disappointing for business owners, and we hear it every week. The good news is that a cleaner path exists, and it starts with a proper comparison. Here is the whole picture, and how we help Australian business owners work through it.

Can I still pay my ATO debt by credit card after 30 November?

The ATO’s reasoning is that, as a government agency, it should not pass credit card merchant fees on to the community. It is writing directly to everyone with a card-linked payment plan, and you can read the ATO’s announcement on credit cards in full. Card payments made after 30 November will simply be unsuccessful.

It sits alongside a wider shake-up. The Reserve Bank removed surcharging on eftpos, Mastercard and Visa cards from 1 October 2026, as set out in the RBA’s surcharging decision. For plenty of business owners, a credit card was a handy buffer: pay the ATO on time, then clear the card over a few weeks. That buffer is closing, and we understand why it stings.

How much is ATO interest costing my business right now?

Compounding is the part that catches people out. Interest is charged on the debt, then on the interest, every single day. Here is what that looks like on a $50,000 overdue amount, assuming the rate holds at 11.51% the whole way through:

• After 3 months (91 days): $51,455.36 owing, so $1,455.36 in interest.
• After 6 months (182 days): $52,953.08 owing, so $2,953.08 in interest.
• After 12 months: $56,098.26 owing, so $6,098.26 in interest.

This is an illustration, not a quote. The actual figure moves each quarter when the ATO resets the rate. You can always check the current GIC rates on the ATO website.

Is ATO interest still tax deductible?

The change came in through the Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025. Before it, ATO interest at least softened the blow at tax time. Now it doesn’t. Even the ATO’s own guidance points business owners towards a conversation about finance. Its bulletin on the cost of carrying ATO debt suggests your tax practitioner’s advice may include a business loan, because some interest on loans connected with running a business may be deductible.

ATO interest now costs your business full price. Interest on a business loan used in your business may still be deductible, and that difference is where a smart decision starts.

Can I use a business loan to pay off my ATO debt?

What lenders look at

Policies on ATO debt vary widely across our 60+ lender panel. Some lenders won’t touch it at all. Others are comfortable, provided the numbers stack up. The things they commonly weigh up are:

• Whether the business can comfortably service the new repayments.
• Recent business bank statements and BAS, showing steady trading.
• Lodgements being up to date, even where payments are behind.
• Whether the ATO has already reported the debt to a credit bureau.
• Whether property or business assets are available as security.

If your books are running behind, that doesn’t automatically rule you out. A business loan using bank statements can be one way in. Secured options, including equity in property, commonly open up longer terms and sharper pricing than unsecured ones.

Why the structure matters

Deductibility follows who borrows and why. Where the business itself borrows to pay its own tax debt, in connection with carrying on that business, the interest can be deductible. Where a director or beneficiary borrows personally to cover a company or trust’s debt, the interest normally isn’t deductible to them. Employees and investors who borrow to pay their personal tax generally can’t claim it either.

That is why the loan has to sit in the right entity from day one. We line the finance up with your accountant’s advice, so the structure works for tax as well as cash flow.

Is a business loan better than an ATO payment plan for ATO debt?

The interest-free exception

Before anything else, check whether you qualify for one of the ATO’s interest-free payment plans. They cover overdue activity statement (BAS) amounts only. The criteria are narrow: annual turnover under $2 million, recent BAS debts of $50,000 or less overdue for up to 12 months, a good payment and lodgement history, and proof of ongoing viability. You also need to show you can’t get finance through normal business channels. If you qualify, GIC is still charged but automatically remitted as long as you keep the plan on track.

For most businesses that can borrow, that last criterion rules it out. Which brings it back to the comparison.

What should business owners with ATO debt do before 30 November?

1. Get your real number. Log in to ATO online services and check the full balance, including GIC that has already accrued.
2. Check your payment method. If a payment plan runs off a credit card, switch it before your next instalment due after 30 November 2026.
3. Ask about interest-free. If the debt is BAS-related, under $50,000 and your turnover is under $2 million, ask the ATO whether you qualify.
4. Talk to your accountant. Confirm whether loan interest would be deductible for you, and which entity should borrow.
5. Talk to us. We compare the panel and structure the finance so you land the most efficient deal for your business.

Timing matters because the ATO’s firmer action can include garnishee notices and director penalty notices, and every option narrows once those start. The earlier the conversation, the more choice you keep.

We know exactly which lenders will look at an ATO debt and how to compare them, from unsecured facilities to property-secured options and even refinancing equipment finance to free up cash flow. We are WA based, help business owners right across Australia, and do it all remotely, so it is one phone call to get started. Have a chat with us and let’s sort it properly.