The amount of an FTL penalty is calculated at the rate of one penalty unit for each period of 28 days or part thereof for which a document is overdue, up to a maximum of five penalty units.
Under most Commonwealth laws, financial penalties are expressed in terms of ‘penalty units’ instead of dollar figures. The value of one penalty unit has been $110 since 1997, and increased to $170 on 28 December 2012.
For failing to lodge on time penalty, the increased rate will only apply where the first day of the relevant 28-day period or part thereof occurs on or after 28 December 2012.
Size tests also apply; taxpayers classified as medium entities will have the penalty amount multiplied by a factor of two, and entities classified as large by a factor of five.
The size of an entity for penalty purposes is related to its assessable income, withholder status, or current annual turnover.
We will calculate the period of time the document is overdue from the day the document is due to the day before the document is received.
If we apply a penalty where the document is overdue we will calculate the amount from the lodgment due date, to the day before the penalty is applied. If the maximum penalty allowed by law has not been applied to an overdue document, we may increase the penalty amount at a later date.
Consequently, the longer you take to lodge a document after the due date, the higher the penalty amount that may be applied.
The maximum amount of an FTL penalty may be applied if the document is not lodged within 113 days of the lodgment due date.
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