Todd PolkeInvestment Strategist l Wealth Coach l Speaker, Todd Polke · Investment Strategist l Helping Investors and Business Owners grow their Wealth Faster

The ATO wants your instalments—but where’s your interest?

18 Mar 2026 · 1 min

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In this monologue, the speaker outlines a tax strategy centered on minimizing and delaying tax payments to avoid giving the Australian Taxation Office (ATO) interest-free use of funds. He explains that the ATO pays no interest on money it holds, yet charges a 17% interest rate on overdue tax liabilities. The speaker advises against the ATO’s suggestion of quarterly instalments, recommending instead that businesses set up PAYG tax variations to retain more cash, keep funds in offset accounts to earn interest, and maintain control over cash flow. He emphasizes the importance of understanding tax rules and using legal methods to manage payments strategically rather than simply complying with ATO directives.

Chapters

Here's my little philosophy on tax. Pay as little as possible, as late as possible. Because while your money is sitting at the ATO, how much are the good people of the Australian Taxation Office, the government, how much interest are they paying you for holding your money? And the answer? Donuts. Big fat zeros. So why on earth would you give them more or allow them to hold on to more of your money where they're not giving you any interest for it? Now, on the flip side, if you owe the ATO some money, well, they're going to charge you, you know, 17% interest rate because they've definitely got your, uh, your back, that's for damn sure. A knife in it, more, more likely. Now this came from a, uh, I was talking to a client yesterday all about who runs a business, all about when they should be paying their taxes because the ATO was going, hey, can you start doing installments on a quarterly basis and you should start doing it this way? And the answer is hell no, definitely not. You keep in your own back pocket, go set up a PAYG tax variation so you get more of your taxation back in your back pocket. And at the very least, leave in your offset account at least Saving you some interest there, even if you've got to pay it back later on rather than sitting at the ATO. Operators, make sure they control their cash flow and they control the earnings that they're going to be able to create on it. Don't default to just doing exactly what the ATO says. There's always ways around things legally and effectively. Know the game, know the rules, and know how to play within it.