An ATO Notice of Assessment is the statement the Australian Taxation Office sends after processing your tax return, confirming your taxable income, the tax calculated on it, any offsets and credits applied, and the final balance you either owe or will be refunded.1Australian Taxation Office. Your Notice of Assessment Once it arrives, your job is to check the figures, note the payment due date if there is one, and decide whether anything needs correcting.
What the Notice of Assessment Shows
The NOA walks through the maths the ATO used to arrive at your final position for the financial year. The main line items are:
- Taxable income: Your total assessable income minus the deductions you claimed.
- Tax on taxable income: The amount calculated by applying the current marginal rates to that income.
- Tax offsets: Reductions such as the Low Income Tax Offset or the private health insurance rebate. The LITO is applied automatically when your taxable income is $66,667 or less.2Australian Taxation Office. Low Income Tax Offset
- Medicare levy: A flat 2% charge on your taxable income that funds Australia’s public healthcare system.3Australian Taxation Office. What Is the Medicare Levy
- Medicare Levy Surcharge: An extra charge if your income exceeds $101,000 as a single (or $202,000 for families) and you don’t hold appropriate private hospital cover. For 2025-26 the surcharge is 1% to 1.5% depending on income tier. This catches people out more than almost any other line, especially those who recently dropped private hospital cover.4Australian Taxation Office. Medicare Levy Surcharge Income, Thresholds and Rates
- PAYG credits: Tax your employer already withheld from your wages, reducing what you still owe.
- Study and training loan repayments: If you carry a HELP, VSL, SFSS or similar loan, any compulsory repayment appears here once your repayment income crosses $67,000 for 2025-26. If this line appears for the first time, your income usually crossed the threshold during the year due to overtime, a second job, or a pay rise.5Australian Taxation Office. Study and Training Loan Repayment Thresholds and Rates
The notice arrives with a tax receipt showing how your tax dollars were allocated across categories of government spending and the current level of Australian Government gross debt.6Australian Taxation Office. Tax Receipt The receipt is informational only and doesn’t affect your tax position.
How and When the NOA Arrives
If your myGov account is linked to the ATO, the NOA and tax receipt land in your myGov Inbox. If you lodged a paper return without a linked myGov account, the ATO mails the notice to the postal address on file.1Australian Taxation Office. Your Notice of Assessment Taxpayers using a registered tax agent will usually have the notice sent to the agent’s system, with the agent forwarding it alongside an explanation.
Returns lodged online are generally processed within two weeks.7Australian Taxation Office. Check the Progress of Your Tax Return Paper returns take about 10 weeks because they require manual handling. Returns selected for further review or data-matching checks can take longer.
Reading the Bottom Line: Refund or Debt
The bottom line is labelled either “Credit” (sometimes “CR”) or “Debit” (“DR”). A credit means you overpaid during the year and the ATO will refund the difference to the bank account linked to your return. A debit means you owe more than was covered by employer withholdings and other credits.
You may also receive a separate statement of account if your balance differs from the assessment outcome itself. That happens, for example, when the ATO offsets a prior year debt against your refund, or when a credit already sat on your account from a previous amendment.
Paying a Tax Debt
The payment due date is printed on the notice and is generally 21 days after the NOA is issued. This applies regardless of when you actually open the letter or check your myGov Inbox, so checking promptly after lodgment matters. Miss the due date and the ATO applies the General Interest Charge, which compounds daily. For the first half of 2026 the GIC runs at an annual rate of roughly 10.65% to 10.96%.8Australian Taxation Office. General Interest Charge (GIC) Rates On a $5,000 debt left unpaid for six months, that produces around $275 in interest alone.9Australian Taxation Office. Interest We Charge
Setting Up a Payment Plan
If you can’t pay in full by the due date, arranging a payment plan before the deadline passes beats ignoring the bill. You can set one up through ATO online services or the self-help phone line, and if your request isn’t accepted through those channels you can call the lodge and pay enquiry line.10Australian Taxation Office. Payment Plans
A few things catch people off guard. The GIC keeps accruing on the outstanding balance for the entire duration of the plan; instalments don’t pause interest. You need to keep lodging all future returns on time and pay any new debts as they arise, or the plan can be cancelled. Income tax and activity statement debts require separate plans. And if you become entitled to a refund while a plan is active, the ATO offsets it against the existing debt rather than paying it to your bank account.
Serious Hardship Relief
In genuinely dire situations the ATO can release you from a tax debt entirely. The test is whether paying would leave you unable to afford food, housing, clothing, medical care, and education by normal community standards. To apply, your lodgments must be up to date and any outstanding disputes or amendment requests must be resolved first.11Australian Taxation Office. PS LA 2011/17 – Administration of the Release from Tax Debt Provisions
The ATO uses an income-and-expenses test, an assets-and-liabilities test, and a broader assessment of your circumstances. Normal possessions like your home, a vehicle, furniture, and basic savings are generally not expected to be sold, but significant assets such as investment properties or luxury items are scrutinised. The ATO also looks at whether you prioritised other creditors ahead of your tax debt or structured your affairs in a way that produced the hardship. Approval is not guaranteed even where genuine hardship exists, because the Commissioner retains discretion to decline.
Fixing a Mistake: Amendments and Objections
If you spot an error after the NOA arrives, the path you take depends on whose mistake it was.
Requesting an Amendment
An amendment fixes your own mistakes: a forgotten deduction, a missing income source, incorrect private health insurance details, or unreported bank interest.12Australian Taxation Office. How to Request an Amendment to Your Tax Return You can lodge amendments through ATO online services in myGov, on a paper form, through your tax agent, or by writing to the ATO. Online amendments are processed fastest, often within a few weeks.
Individuals generally have two years from the day after the NOA is issued to request an amendment. Sole traders have four years for the 2024-25 income year onwards (two years for earlier years). Businesses and super entities typically have four years.13Australian Taxation Office. Time Limits on Tax Return Amendments Once the window closes the ATO isn’t obliged to accept your request, so the two-year individual limit deserves particular attention.
Lodging an Objection
An objection is different. It challenges how the ATO applied the law to your situation: a miscalculation, a denied offset, or a misinterpretation of your circumstances. Objections must be lodged in writing with clear evidence supporting your position. Time limits vary by decision type, from 60 days to four years.14Australian Taxation Office. Steps to Lodge an Objection For a standard income tax assessment, the objection period for individuals is typically two years from the date the NOA was issued.15Australian Taxation Office. PS LA 2003/7 – How to Treat a Request to Lodge a Late Objection
A separate ATO officer reviews your objection, not the person who made the original decision. If the ATO disallows the objection, you can apply to the Administrative Appeals Tribunal for review or appeal to the Federal Court. The escalation deadline is generally 60 days from the date of the objection decision. Professional tax advice before this stage is worth the cost, because the process becomes adversarial and procedural errors can be difficult to undo.
Penalties for Late or Incorrect Returns
The consequences of ignoring the NOA or lodging a careless return can be steep relative to the tax involved.
Failure to Lodge on Time
If your return is overdue, the ATO charges one penalty unit for every 28-day period (or part of one) that the return remains outstanding, up to five penalty units.16Australian Taxation Office. Failure to Lodge on Time Penalty A penalty unit is currently $330, so the maximum failure-to-lodge penalty for an individual is $1,650.17Australian Taxation Office. Penalty Units That amount applies even if you were owed a refund.
False or Misleading Statements
If the ATO determines your return contained a false or misleading statement that produced a shortfall, the penalty is a percentage of the shortfall amount:
- Lack of reasonable care: 25% of the shortfall.
- Recklessness: 50% of the shortfall.
- Intentional disregard of the law: 75% of the shortfall.
These are base rates and can be increased or reduced depending on circumstances.18Australian Taxation Office. PS LA 2012/5 – Administration of the False or Misleading Statement Penalty The distinction between “lack of reasonable care” and “recklessness” often comes down to whether you made an honest mistake or ignored something you should have investigated. Keeping records and making genuine attempts to get things right is the best protection against the higher tiers.