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 →
If you just want the dollar amounts for a normal individual return, they're here: fine for a late tax return. This article explains the machinery underneath, because understanding it is how you beat it.
What the FTL penalty applies to
FTL penalties cover any ATO lodgment obligation missed by its due date:
- Income tax returns
- Business activity statements and instalment activity statements
- FBT returns, PAYG withholding annual reports and taxable payments annual reports
- Single Touch Payroll finalisations
Each late document is penalised separately. A sole trader with one late return and four late BAS has five clocks running at once. See our guide to overdue BAS statements.
The penalty unit system
| Entity size | Multiplier | Maximum per document |
|---|---|---|
| Individuals and small entities (turnover under $1m) | 1x | $1,820 |
| Medium entities (turnover $1m to $20m) | 2x | $3,640 |
| Large entities (turnover over $20m) | 5x | $9,100 |
| Significant global entities | 500x | $910,000 |
Because part periods count in full, a return one day late is already in the first 28-day period, and day 113 hits the cap.
When the ATO applies it, and when it doesn't
- Usually not applied: nil returns, refund returns, first-time lateness with a clean history, and returns lodged voluntarily before ATO contact.
- Usually applied: tax owing on the late document, repeat lateness, and lateness after an ATO reminder.
- Almost always applied: lodgment failures that continue after a formal demand, where penalties are only the beginning.
The ATO must give written notice of an FTL penalty, stating the amount and a due date at least 14 days away. The penalty itself, if unpaid, then accrues general interest charge, effectively a charge on the charge.
The escalation ladder if you keep not lodging
How ATO action escalates
Reminders
Letters and myGov messages. Cheap to fix: just lodge.
FTL penalties
One penalty unit per 28-day period, capped at five, per document.
Default assessment
The ATO estimates your income from bank data, employer reports and industry benchmarks and issues an assessment on the estimate. The estimate skews high, and it carries an administrative penalty of 75% of the tax shortfall. You can object, but the burden of proving the true figure sits with you.
Formal demand and prosecution
Continued refusal can be prosecuted, with fines per offence and, in extreme repeat cases, imprisonment. This stage is essentially reserved for people who never engage at any point.
The entire ladder collapses the moment you lodge. Every stage is worse than lodging voluntarily one step earlier, which is the system's actual design. See what to do about a default assessment.
Safe harbour: when your agent's delay isn't your penalty
If you gave a registered tax agent everything needed to lodge on time and the agent failed to lodge, the safe harbour provision means the FTL penalty doesn't apply to you. You'll need to show you supplied the information in time, which is one more reason to keep dated email trails with your agent.
Penalties are only half the bill
FTL penalties are fixed and capped, while general interest charge on unpaid tax is neither. On multi-year catch-ups, GIC frequently exceeds the penalties. Run both numbers in the penalty calculator, and remember every dollar of penalty and interest is negotiable through remission.
Penalty unit and GIC rates checked July 2026.
Frequently asked questions
What is a failure to lodge penalty?
How much is a penalty unit?
What are the penalties for lodging a late tax return with tax owing?
What is a default assessment?
Do FTL penalties apply to BAS as well as tax returns?
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.