Failure to Lodge Penalty: What Happens If You Miss Your Deadline
Updated: Oct 27
Quick answer: If you miss the 2 November 2026 deadline, the ATO can apply a failure to lodge penalty of $364 for each 28-day period your return is overdue, up to a maximum of five periods, a $1,820 cap. Lodging as soon as you can, even late, is the best way to limit penalties and avoid a default assessment.
What Is the Failure to Lodge Penalty?
The failure to lodge penalty is a fixed charge the ATO can apply for every 28-day period (or part of one) that a tax return, activity statement or other required document stays overdue, worked out in penalty units rather than a straight dollar figure.
One penalty unit is currently $364 (for infringements from 1 July 2026 onward), and the base penalty for individuals and small withholders is one unit per 28-day period late, capped at a maximum of five penalty units. That means the most you can be charged under this specific penalty is $1,820, no matter how many months or years a return stays outstanding beyond that cap.
Days overdue | Penalty units | Penalty amount |
1 to 28 days | 1 unit | $364 |
29 to 56 days | 2 units | $728 |
57 to 84 days | 3 units | $1,092 |
85 to 112 days | 4 units | $1,456 |
113 days or more | 5 units (maximum) | $1,820 |
What Happens If You Don't Lodge at All?
If you ignore the ATO entirely, it can issue a default assessment of your income without your input, and that assessment carries its own separate 75% penalty on top of whatever tax it decides you owe.
A default assessment means the ATO estimates your taxable income using information it already holds, such as data from employers, banks and other agencies, and this estimate may not be as accurate as a return you lodge yourself. Once issued, it attracts a penalty equal to 75% of the assessed tax-related liability, so an extra $75 for every $100 the ATO decides you owe. Before it gets to that point, the ATO says it will contact you by phone and in writing and give you ample opportunity to lodge. In more serious or repeated cases, failing to lodge is treated as a criminal offence, and a conviction can carry further fines or imprisonment for up to 12 months. The ATO may also issue a final notice, select an overdue return for audit, or withhold a refund in exceptional circumstances, so it is always better to lodge, even very late, than to let it reach this stage.
Will You Be Charged Interest As Well As a Penalty?
Yes. The general interest charge (GIC) is a separate daily, compounding charge the ATO applies to any tax debt you owe, on top of whatever failure to lodge penalty applies.
The GIC and the failure to lodge penalty are two different things: the penalty is for lodging late, while the GIC is for owing money and not paying it on time. The GIC compounds daily, so the longer an unpaid tax debt sits outstanding, the more it grows. If you are simply owed a refund rather than owing tax, the GIC has nothing to accrue on, though the failure to lodge penalty can technically still apply to the late return itself.
Does the ATO Always Charge the Full Penalty?
No. The ATO can remit (reduce or cancel) all or part of a failure to lodge penalty based on your circumstances, but you have to lodge the overdue document first before you can ask for that.
In practice, the ATO often shows leniency for someone lodging late for the first time, especially where there is a reasonable explanation and no pattern of repeated lateness. A request for remission is made after the outstanding return or document has actually been lodged, not instead of lodging it. If you are already a client of a registered tax agent such as Tax Falcon, it is also worth asking them directly whether their lodgment arrangements with the ATO give you any extra time, since this can sometimes apply to clients who are on an agent's books before the standard deadline passes.
What Should You Do Next If You've Missed the Deadline?
Lodge your tax return as soon as you can, even if it is already late, since the ATO consistently treats a late return far more leniently than an ignored one.
Lodge now, regardless of how late it is. A late return almost always leads to a smaller penalty than no return at all, and it stops the clock on the 28-day periods used to calculate the failure to lodge penalty.
Check whether you actually needed to lodge. If your income was under the tax-free threshold and no tax was withheld, you may only need to submit a non-lodgment advice instead of a full return.
Contact the ATO or a registered tax agent. The ATO can be reached on 13 28 61, or a registered tax agent can lodge on your behalf and raise a penalty remission request once your return is in.
Ask about a payment plan if you owe money. If lodging reveals a tax debt you cannot pay immediately, the ATO can discuss payment arrangements rather than leaving the debt to accrue the general interest charge unmanaged.
Don't ignore ATO contact. A phone call or letter from the ATO about an overdue return is your opportunity to sort it out before it escalates to a default assessment or further action.
For the full 2025-26 lodgment calendar, see Tax Time 2026: Every Key Date and the 2 November Deadline, and for the ATO's own guidance on penalties, see ato.gov.au.
Behind on your tax return? Start My Return with Tax Falcon and let a registered agent help you lodge, even if you are already past the deadline.
Frequently Asked Questions
What is the failure to lodge penalty in Australia?
The failure to lodge penalty is a fixed ATO charge, currently $364 per 28-day period (or part of one) a tax return or other required document is overdue, up to a maximum of five periods, or $1,820, for individuals and small withholders.
How much is the ATO late lodgment penalty?
For an individual lodging a tax return late, the penalty starts at $364 for the first 28 days overdue and increases by the same amount for each further 28-day period, capping at $1,820 after 113 days or more.
What happens if I don't lodge a tax return at all?
The ATO can eventually issue a default assessment of your income using information it already holds, which carries an extra 75% penalty on the assessed tax, and in serious or repeated cases failing to lodge is a criminal offence that can lead to further fines or imprisonment.
Does the ATO charge interest on a late tax return?
The general interest charge applies separately to any unpaid tax debt, calculated daily on a compounding basis, and is different from the failure to lodge penalty, which is specifically for lodging late rather than for owing money.
Can the failure to lodge penalty be waived?
Yes, the ATO can remit all or part of the failure to lodge penalty depending on your circumstances, but you need to lodge the outstanding return first before you can request that remission.
Related reading: Check all tax return dates and deadlines, see the 2 November tax deadline, and lodge your tax return online to avoid penalties.
