The ATO is authorised under tax law to impose administrative penalties on taxpayers who fail to meet their obligations, with penalty unit amounts rising to $364 for infringements occurring on or after 1 July 2026.
The Australian Taxation Office (ATO) has updated its guidance on penalty units to reflect an increase in the penalty unit value on 26 June 2026. For infringements occurring on or after 1 July 2026, the penalty unit amount has increased to AUD 364, up from AUD 330, which applied to infringements committed between 7 November 2024 and 30 June 2026.
Why the ATO imposes penalties
Tax laws authorise the Australian Taxation Office (ATO) to impose administrative penalties when a taxpayer fails to meet their tax obligations. Penalty provisions are there to encourage all taxpayers to take reasonable care in complying with their tax obligations. The ATO considers a taxpayer’s circumstances when deciding what action to take.
Taxpayers cannot claim a deduction for penalties the ATO imposes.
Penalty unit amount
Table: Penalty Unit
| When infringement occurred | Penalty unit amount (AUD) |
| On or after 1 July 2026 | 364 |
| 7 November 2024 to 30 June 2026 | 330 |
| 1 July 2023 to 6 November 2024 | 313 |
| 1 January 2023 to 30 June 2023 | 275 |
| 1 July 2020 to 31 December 2022 | 222 |
| 1 July 2017 to 30 June 2020 | 210 |
| 31 July 2015 to 30 June 2017 | 180 |
| 28 December 2012 to 30 July 2015 | 170 |
| Up to 27 December 2012 | 110 |
How the ATO notifies taxpayers
If a taxpayer is liable for a penalty, the ATO will notify them in writing and include:
- the reason for the penalty
- the amount of the penalty
- the due date for payment (at least 14 days after notice is given).
How the ATO calculates the penalty
The ATO calculates the penalty amount using either:
- a statutory formula, based on the taxpayer’s behaviour and the amount of tax avoided
- multiples of a penalty unit.
The ATO also has certain rules for:
