ATO late lodgement penalty: up to $364 per 28 days, capped at $1,820 per document · interest 11.43% p.a. compounding daily · See how to remit them →
How is the failure to lodge penalty calculated?
The failure to lodge (FTL) penalty is worked out in penalty units, not a flat dollar figure. From 1 July 2026 one penalty unit is worth $364 (it was $330 before that date). The ATO applies one unit for every 28-day period, or part of one, that a return, statement or BAS is overdue, up to a cap of five units per document.
For an individual or small entity, the maximum failure to lodge penalty per document is currently $1,820 (5 units × $364). Medium and large entities are multiplied further, because the penalty scales with the size of the business.
Rates checked 30 July 2026 - penalty unit $364, FTL cap $1,820 from 1 July 2026. For failures occurring on or after 1 July 2026, one Commonwealth penalty unit is $364. Earlier failures may be calculated using the penalty-unit value applicable at that time.
| Entity size | Multiplier | Penalty units (max) | Maximum penalty |
|---|---|---|---|
| Individual / small entity | ×1 | 5 units | $1,820 |
| Medium entity | ×2 | 10 units | $3,640 |
| Large entity (assessable income $20m+) | ×5 | 25 units | $9,100 |
A worked example: say your 2022 individual tax return was due but you didn't lodge it until 140 days later. That's five full 28-day periods, so the penalty caps out at $1,820 for that one return - assuming the ATO decides to apply it at all, which is not automatic.
What's the maximum FTL penalty per return?
For most individuals and small businesses, the maximum is $1,820 per overdue document as at 30 July 2026. It's worth remembering this cap applies per document, so if you have six years of overdue tax returns and four overdue BAS, penalties are calculated separately for each one, not as one combined figure.
Do you always get fined for lodging late?
No, you don't always get fined for lodging late. The ATO applies a degree of discretion, and in practice many voluntary catch-ups - especially where a return is likely to produce a refund, or where it's a first-time slip-up - don't attract an FTL penalty at all. This unofficial safe harbour is one reason it's usually better to come forward before the ATO chases you, rather than wait it out. Our guide to overdue tax returns covers how the ATO typically responds when you lodge voluntarily.
What is penalty remission and who qualifies?
Common grounds the ATO will consider for remission include serious illness, a natural disaster, family or relationship breakdown, a first-time or isolated late lodgement, and a genuine voluntary disclosure before the ATO had to chase you. None of these guarantee a remission, but they're the sort of factual circumstances a request should set out clearly.
How to apply for FTL penalty remission?
You apply for remission by lodging the overdue return first, then submitting a written request to the ATO explaining why the penalty should be reduced or removed. The steps below are the order a registered tax agent typically follows.
How to apply for remission of an ATO failure to lodge penalty
Lodge the overdue return or statement first.
The ATO generally won't consider remission until the outstanding document is actually lodged, so this always comes first.
Check whether a penalty has actually been applied.
Not every overdue lodgement attracts an FTL penalty - a tax agent can check your ATO account to confirm before you request anything.
Gather your supporting facts.
Dates, medical certificates, evidence of a disaster, or a simple explanation of the circumstances all strengthen a remission request.
Submit the remission request in writing.
This is usually done through the ATO's online services or by an agent lodging the request directly on your behalf.
Wait for the ATO's decision and follow up if needed.
The ATO may approve, partly approve or decline the request; a follow-up or review can sometimes be requested if new facts come to light.
FTL penalty vs interest (GIC) - they're different?
Yes, the FTL penalty and the general interest charge (GIC) are two completely separate things. The FTL penalty punishes lateness in lodging, while GIC is daily-compounding interest charged on any unpaid tax debt, regardless of whether your returns are lodged on time. You can read the full breakdown in our guide to the ATO general interest charge.
Frequently asked questions
Is the FTL penalty per year or per return?
Can penalties exceed the tax owed?
Does the ATO automatically remit penalties?
Does the penalty apply if I'm owed a refund?
What is the maximum ATO late lodgement penalty?
Can a tax agent get penalties waived?
General information only - not personal tax, financial or legal advice. Consider your own circumstances or speak to a registered tax agent. Remission of penalties or interest and payment plans are decisions of the ATO and outcomes can't be guaranteed.