Can't Pay Your September Quarter BAS? Here's What Actually Happens Next

Your September quarter BAS is due on 28 October, and you already know you don't have the full amount sitting in your account. That's not a niche problem — it happens to well-run businesses coming off a genuinely good month and heading into a genuinely quiet one, not just businesses in trouble.

What actually matters now isn't the due date. It's what you do in the next few weeks. The ATO treats "I can't pay" and "I'm not going to lodge" as two completely different situations — and under real financial pressure, a lot of business owners end up choosing the more expensive one anyway, even when they already know better.

Key takeaways

• Lodging your BAS on time protects you even if you can't pay in full — the failure-to-lodge penalty attaches to not lodging, not to owing money.
• Unpaid BAS accrues the ATO's general interest charge daily, currently 11.43% per annum for the July–September 2026 quarter, and this interest is no longer tax-deductible.
• The ATO can disclose a business tax debt to credit reporting bureaus once it reaches $100,000, is overdue by more than 90 days, and the business isn't engaging — a payment plan counts as engaging.
• The GST and PAYG withholding components of unaddressed BAS debt are exactly the kind of liability that can lead to a Director Penalty Notice, making directors personally liable. (DPNs also cover unpaid super, but that's reported separately, not through your BAS.)
• You generally have three real options once you know you can't pay in full: an ATO payment plan, a loan to clear it, or doing nothing — and only one of those guarantees things get worse.

The mistake most business owners make when they can't pay BAS

Here's the assumption that feels responsible and turns out to be the costliest move available: waiting to lodge your BAS until you have the money to pay it.

It feels responsible because it feels honest — why report a debt you can't cover yet? You've probably already heard the standard advice here: lodge anyway. It's genuinely the most repeated piece of guidance on this topic, for good reason. The gap isn't in the advice itself. It's between knowing it and acting on it once the pressure is real — and the ATO's own numbers on Director Penalty Notices suggest that gap catches a lot of otherwise well-run businesses.

The ATO's rules don't treat "I can't pay" and "I haven't lodged" the same way. Lodging on time and paying on time are two separate obligations, with two separate penalty regimes. Delaying lodgment doesn't buy you time. It stacks a failure-to-lodge penalty on top of the payment problem you already have.

If you take one thing from this article, take this: lodge your BAS by 28 October regardless of whether you can pay it in full. What this article adds past that first, familiar piece of advice is the actual mechanics — the specific figures, the week-by-week sequence, and a genuine comparison between what a payment plan costs and what a loan costs, which is where most coverage of this topic stops.

Lodge on time even if you can't pay — here's why

The ATO'sfailure-to-lodge (FTL) penalty is calculated in 28-day blocks, and it applies specifically to not lodging your BAS by the due date — not to owing money afterwards. Each 28-day period, or part of one, that a BAS sits unlodged costs one penalty unit, up to a maximum of five. As of 1 July 2026, one penalty unit is $364, which puts the maximum FTL penalty at $1,820 per BAS for a small business or individual (medium and large withholders face two or five times that base amount).

That penalty is entirely avoidable. Lodge on time — even with nothing paid against it — and the FTL penalty doesn't apply. Interest still runs on the unpaid amount, which we'll get to next, but interest is a separate and far more manageable cost than a stacked penalty layered on top of it.

There's a further reason lodging on time matters if you use a bookkeeper or registered BAS agent: safe harbour. If your agent had everything they needed to lodge on your behalf, and the delay wasn't down to any recklessness or disregard of the law on their part, you may not be liable for the FTL penalty at all. Both of those conditions need to hold, and the protection depends on the statement actually being lodged — loop your agent in now if payment is the issue, since this article is about what happens once payment is the problem, not the mechanics of preparing the BAS itself.

What actually happens, week by week, if you can't pay

From day one

The ATO'sgeneral interest charge (GIC) starts accruing the day after your BAS payment was due, whether or not you've lodged. GIC compounds daily, and the rate is reviewed every quarter — for the July–September 2026 quarter, it's running at 11.43% per annum. Since 1 July 2025, GIC is no longer tax-deductible, which makes an unpaid BAS a genuinely expensive liability to leave sitting — not a cheap way to buy yourself time.

Around the 28-day mark

If you haven't lodged by the due date, the first FTL penalty unit applies here — and again every 28 days after that, up to the five-unit cap. This is the penalty covered above, and it's the one lodging on time avoids entirely.

Past 90 days and $100,000

If your total tax debt reaches $100,000 or more and stays overdue for more than 90 days, the ATO candisclose it to credit reporting bureaus — but only if you're not engaging with them to manage it. A payment plan counts as engaging. Before any disclosure happens, the ATO issues a formal notice giving you 28 days to act, so no business is reported without warning.

If nothing changes

Unaddressed BAS debt is exactly the kind of unpaid PAYG withholding and GST liability that can trigger a Director Penalty Notice, making company directors personally liable for the amount. We've covered the full DPN mechanics — lockdown versus non-lockdown, and what your options look like once one lands — in our guide toDirector Penalty Notices and ATO debt loans. The short version: the earlier you act, the more options stay open.

Your three real options, compared honestly

Once you know you can't pay in full, there are three paths available — and only one of them guarantees the situation gets worse.

Option 1 — an ATO payment plan

For debts of $100,000 or less, you can generally set up a payment plan through ATO online services or the automated phone line, without needing to speak to anyone. Above that threshold, you'll typically need to contact the ATO directly or work through a registered tax agent.

A payment plan keeps you "engaging" for credit reporting purposes and avoids further penalty escalation. But GIC keeps compounding on the outstanding balance for as long as it takes to pay it off, and that interest is no longer deductible — so the debt can end up costing more the longer the plan runs.

Option 2 — a loan to clear it in full

Clearing the BAS debt in one payment stops GIC accruing immediately and removes it as a factor in any future credit bureau disclosure or DPN consideration. Aworking capital loan sized to cover the shortfall is the most direct version of this — you're not taking on new operational debt, you're converting a compounding ATO liability into a fixed, known repayment.

Broc Finance places these assessments against a panel of 150+ lenders. Our brokers — CPA-qualified, with bank and non-bank credit backgrounds — read your file the way an underwriter will before anything goes to a lender, so you get an honest answer without a hard credit enquiry against your file. Not every lender treats a pre-DPN cash flow gap the same way; some read it as a routine working capital request, others want more context. Knowing which is which before you apply is most of the value in using a broker here.

A pattern we see often: a business has a genuinely strong quarter behind it and a genuinely quiet one ahead, and the BAS lands in the gap. The debt itself isn't large relative to the business's turnover — it's a timing problem, not a viability problem. In that situation, a short-term facility sized to the BAS amount clears the debt before it has time to compound or trigger a credit bureau conversation, and the business repays it against the stronger trading period already visible on the horizon. (General pattern description, not a specific client case.)

We see this shape up the same way across very different businesses — a trade business between a finished job and the next deposit, a hospitality venue coming off a quiet month, a professional services firm waiting on an overdue invoice. The industry changes; the timing problem doesn't.

Check what you could access with ano-obligation, no-hard-credit-check assessment from Broc Finance.

Option 3 — doing nothing

Waiting — without lodging, without a payment plan, and without a plan to pay — is the only one of the three options that guarantees the situation escalates. GIC keeps compounding, the FTL penalty keeps stacking every 28 days, and the clock toward both credit bureau disclosure and DPN risk keeps running regardless of whether you've engaged with any of it.

It's also the option many business owners default to without ever really choosing it — not through a decision, but through avoidance, because the size of the problem feels too uncomfortable to look at directly. It's more expensive to look away than to act, and every option above costs less than this one.

If it's already gone further — what a Director Penalty Notice means here

If you've already received a Director Penalty Notice, the calculus changes and the clock gets shorter — typically 21 days to act, or immediate personal liability if it's a lockdown notice. That's a more urgent situation than the one this article is written for, and it deserves its own detailed treatment. Our guide tousing a business loan to pay ATO tax debt covers exactly that: the difference between a lockdown and non-lockdown DPN, what genuinely qualifies as a defence, and how a loan sized to clear the debt in full compares to a payment plan once a notice has actually landed.

This is general information, not personal tax or legal advice. If you're weighing up lodgment or payment decisions for your specific situation, talk to a registered tax agent or BAS agent alongside any finance conversation.

The debt doesn't wait for you to feel ready

The mistake that costs the most isn't being unable to pay your BAS in full — plenty of well-run businesses hit that exact wall. The mistake is treating "I can't pay" as a reason to delay lodging, when the ATO's own rules make lodging on time the one move that keeps every other option open.

You now know the actual sequence: lodge regardless, understand what GIC and the FTL penalty each cost, and choose between a payment plan and a loan using real numbers instead of guesswork.

If a loan is the option that makes sense for your numbers, ano-obligation assessment with Broc Finance takes one conversation and doesn't touch your credit file until you decide to proceed.

Frequently asked questions

What happens if I lodge my BAS but can't pay it?

Lodging on time means the failure-to-lodge penalty doesn't apply, even if you can't pay in full. The ATO's general interest charge still accrues daily on the unpaid amount, but you avoid the separate, stacking penalty that applies specifically to late lodgment.

Is it better to lodge late or not lodge at all if I can't pay?

Lodge on time regardless. The failure-to-lodge penalty is tied to lodging late, not to owing money, so delaying lodgment until you can pay adds an avoidable penalty on top of a debt you already have.

Can the ATO take money from my bank account for unpaid BAS?

The ATO can take firmer action on unpaid debts, including garnishee notices that direct amounts to be paid directly from your accounts or from money owed to you by customers, generally after other contact and collection steps haven't resolved the debt.

Will unpaid BAS affect my credit score?

It can, once your total tax debt reaches $100,000 or more, is overdue by more than 90 days, and you're not engaging with the ATO to manage it. A payment plan counts as engaging and prevents disclosure to credit reporting bureaus.

Can I set up a payment plan for my BAS debt?

Yes. For debts of $100,000 or less, you can generally set one up through ATO online services or the automated phone line. Above that threshold, contact the ATO directly or go through a registered tax agent.

What is a Director Penalty Notice and how does it relate to BAS?

A Director Penalty Notice makes company directors personally liable for unpaid PAYG withholding, GST and superannuation guarantee. The GST and PAYG withholding components of a BAS left unaddressed for long enough are exactly the kind of liability that can lead to one — see our full guide to Director Penalty Notices for the complete mechanics.