Collectable tax debt reaches A$62.2 billion as small businesses carry the largest share
Australia's collectable tax debt reached A$62.17 billion at June 30, 2026, with small businesses accounting for A$40.74 billion of that amount. The Australian Taxation Office's annual report shows a growing debt-recovery challenge even as most taxpayers continued to meet their obligations on time.
The collectable figure, commonly rounded to A$62.2 billion, was up 14.6 per cent from the previous year. It is not the same as the entire tax-debt balance. Once disputed debt, insolvency debt and debt not being actively pursued because collection is considered uneconomic are included, the reported total was A$126.27 billion.
Small businesses carry the largest share
Small businesses held roughly two-thirds of collectable debt. Their A$40.74 billion collectable balance compared with A$35.86 billion a year earlier. Across all debt categories their reported balance was A$68.26 billion, including A$5.49 billion under objection or appeal, A$13.40 billion in insolvency and A$8.63 billion classed as uneconomic to pursue.
The agency says growth reflects new unpaid liabilities, interest added to older balances and liabilities raised through compliance work. It also reflects closer monitoring of taxpayers whose ability to pay may have improved, allowing some debts previously left inactive to return to active recovery. The increase therefore cannot be read solely as a measure of newly missed payments.
Reporting changes affect comparisons
There is a further warning when comparing the total debt book with earlier years. From 2025-26 the report includes all uneconomic debt not being pursued, including amounts that were previously invisible in taxpayer account balances. On that comparable basis, the previous year's total debt would have been about A$115.0 billion, rather than the previously reported A$101.56 billion.
The ATO has also changed how taxpayers are assigned to population segments, so comparisons between individual segments need care. Its main debt categories exclude different amounts from some financial-statement measures. These accounting and classification issues do not remove the pressure on small businesses, but matter when describing how much the debt book has grown.
Recovery action and support
During 2025-26 the agency issued 89,842 director penalty notices to individual directors, compared with 84,529 in the previous year. Those notices covered A$5.1 billion in company liabilities involving pay-as-you-go withholding, GST or superannuation guarantee charges. About A$1.5 billion had been collected against the liabilities covered by that year's notices by June 30, with more expected later. The number of notices is not a count of distinct directors.
The report identifies 44,476 small businesses with A$13.32 billion in collectable debts above A$100,000, more than 90 days old and without active engagement with the ATO about the debt. That is a defined high-risk group, not the number of all small businesses owing tax. Active payment plans, insolvency, liquidation and disputed-debt activities are excluded from that particular measure.
The ATO says it offers tailored payment plans and deferrals to taxpayers in short-term difficulty, including those affected by natural disasters. About 17,300 flexible plans went to eligible businesses struggling with high fuel costs. It also uses firmer measures where taxpayers do not engage or deliberately avoid obligations, including legal recovery and departure prohibition orders; 82 of the latter were issued during the year.
Alongside the rising debt, payment-on-time performance improved: 90.1 per cent of tax liabilities were paid on time and in full, against 89.4 per cent a year earlier, while 95.3 per cent were paid within 90 days. The report thus describes two developments at once: better payment performance for most liabilities and a larger stock of unresolved debt requiring collection or support.