Your EOFY tax bill is bigger than expected: what to do before it's due

It’s one of the stranger moments in running a business: the accountant rings to say you’ve had your best year yet, and then tells you what you owe. The profit was real, but it went into stock, new staff, a vehicle, or customers who haven’t paid yet. The tax bill, meanwhile, wants cash.

A big tax bill isn’t a crisis. An unplanned, unpaid one can become one. This guide covers what to do in the weeks between seeing the number and the date it’s due.

Why is the bill bigger than expected?

Usually one or more of these:

Cause	What’s happening
A stronger year	Profit rose, and tax rose with it — but cash didn’t
PAYG instalments set too low	Instalments were based on an older, weaker year, so less was prepaid
A one-off gain	Selling an asset or property added to taxable income
Deductions used up	Losses or big deductions from earlier years no longer reduce this year’s tax
Cash tied up in growth	Profit sits in stock, debtors or equipment rather than the bank

Understanding the cause matters, because it tells you whether next year will repeat. A one-off gain won’t; low instalments and growth will, unless you plan for them.

What should I do first?

1. Lodge on time. The ATO asks businesses to lodge by the due date even when they can’t pay. It keeps penalties down and shows you’re engaging.
2. Confirm the due date. Your notice of assessment and your accountant will confirm exactly when payment is due. Put it in your calendar with a reminder two weeks earlier.
3. Check your cash position over the next three months, including BAS, super and wages.
4. Decide on a payment route now, not after the reminders start.

If the bill lands close to a BAS due date — 28 October, 28 February, 28 April or 28 July for quarterly lodgers — plan both together, so paying one doesn’t create a problem with the other. Our page on can’t pay your BAS covers the BAS side.

What are the ways to pay it?

From cash or by collecting debtors. If customers owe you more than the tax bill, a firm round of collections may solve it. It’s the cheapest route.

An ATO payment plan. If the business owes $200,000 or less, you may be able to set one up online. Interest continues to accrue, and ATO interest charges incurred from 1 July 2025 are no longer tax deductible. A plan also needs every future lodgement and payment made on time alongside the instalments.

Outside funding. A business loan pays the ATO in full by the due date, and you repay the lender over a schedule that suits the business. Options include unsecured or cash-flow funding, usually $5,000 to $500,000, with the limit worked out from turnover and bank statements, and property-secured loans of $20,000 up to $5,000,000 for larger amounts. See unsecured rescue funding.

If the funding route looks sensible, you can check what you’d qualify for in about a minute, without a credit check.

Plan or loan: how do I compare?

Put the two side by side over the same period:

• The plan: the tax, plus estimated general interest charge over the plan’s length, which isn’t deductible for ATO interest incurred from 1 July 2025.
• The loan: ask the lender for an estimated total cost of finance. Interest on a business loan used for business purposes is generally deductible, but confirm with your accountant.
• The risk: a plan that fails can bring firmer action; a loan swaps the ATO for a lender, with a fixed schedule.
• The effect on cash flow: which repayment schedule does the business comfortably carry?

We never quote rates on this site, because every loan is priced on the business’s own circumstances. The comparison should always be done with real numbers.

An illustrative example

Illustrative only. A Brisbane landscaping design business has a breakout year after winning two large residential developments. Its PAYG instalments were based on the previous, smaller year, and most of the profit went into a second crew, a new ute and trailers. The company tax bill is several times what the owner expected, and it’s due in a few weeks.

The owner lodges on time and asks her accountant to confirm the due date. Rather than a long payment plan while the business is still growing, she arranges an unsecured facility sized on the company’s turnover, pays the ATO in full before the due date, and repays the facility over the following months. Her accountant also adjusts the next year’s instalments to match the bigger business, so the problem doesn’t repeat.

How do I make sure this doesn’t happen next year?

• Review before 30 June. A tax planning meeting in May or early June lets you see the bill coming and plan purchases, super contributions and cash.
• Match instalments to reality. Ask your accountant whether your PAYG instalments reflect current profits.
• Quarantine tax money. Move a set percentage of every deposit into a separate tax account.
• Watch the monthly numbers. Our monthly five-number check includes your ATO balance and cash buffer.
• Set up a buffer. A standby line of credit, arranged while the business is strong, can cover tax-time peaks without stress.

What if I’ve already missed the due date?

Don’t wait for the reminders to pile up. Ring the ATO — our guide to calling the ATO when you can’t pay covers what to prepare — and decide quickly between a plan and a pay-out. If letters have started arriving, our ATO debt help page sorts them by stage and urgency.

What happens if the bill goes unpaid?

The ATO’s usual path applies: interest from the due date, then reminders, then warnings, and if the debt stays unresolved, firmer action. For a company’s income tax specifically, the director penalty regime doesn’t apply — DPNs cover PAYG withholding, GST and super guarantee charge — but the ATO can still issue garnishees, report a large overdue business debt to credit bureaus after giving notice, or take legal action such as a statutory demand.

Many businesses also find that an unpaid income tax bill drags the next BAS down with it, and that’s when the DPN-covered debts start to build. Our page on ATO warning letters explains how each stage looks.

Will an unpaid tax bill affect a future loan?

It can. Lenders ask about ATO debt, and many check ATO statements. A large overdue balance can also end up on the business’s credit file: the ATO can report business tax debts where at least $100,000 is overdue by more than 90 days and the business isn’t engaging, after sending a notice that gives 28 days to act. Paying on time — or arranging payment before the due date — keeps your record clean for the equipment finance, fit-out loan or property purchase you might want next year.

That’s another reason to decide early. Funding a tax bill while the business is strong and the ATO balance is clear is far easier than refinancing it later, after reminders and interest have built up.

Good year, awkward bill?

A big tax bill after a strong year is a good problem to have, as long as it doesn’t turn into ATO debt. Paying it on time, funded if necessary, keeps the business’s record clean and its momentum going.

The enquiry takes about a minute, and there’s no credit check at the first-enquiry stage. We don’t send your details to a queue of lenders; a real person looks at the bill and your turnover and calls you. Please be accurate about the tax amount, the due date and your recent trading, so we can recommend the right option first time.

Fund this year’s tax bill on your terms →