9Late payment penalty

9 Late payment penalty

(1) If: (a) levy or charge is payable by a levy payer or charge payer; and (b) an amount (the unpaid amount) of that levy or charge remains unpaid at the end of the day (the due day) on which the levy or charge is due to be paid; the levy payer or charge payer is liable to pay to the Commonwealth, by way of penalty, an amount, worked out under subsection (3), for each day in the period under subsection (2).

Note: The penalty stops accruing once the levy payer or charge payer pays the unpaid amount of levy or charge.

Penalty period (2) The period begins on the day after the due day and ends at the end of the day before the day on which the whole of the unpaid amount, or the outstanding balance of the unpaid amount, is paid. Amount of penalty (3) The amount of penalty for a day (the penalty day) in the period described in subsection (2) is worked out using this method statement.

Method statement

Step 1. Divide 0.02 by the number of days in the calendar month in which the penalty day occurs.

Step 2. Multiply the amount at step 1 by the sum of:

(a) so much of the unpaid amount as remains unpaid at the end of the penalty day; and

(b) the total amount of penalty (if any) for days in each calendar month before the calendar month in which the penalty day occurs.

Step 3. Round the amount at step 2 to the nearest cent (rounding 0.5 cents upwards): the result is the amount of penalty for the penalty day.

Note: The amount of penalty for a day is based on a rate of 2% per month.

Note: Example: Assume $1,200 levy is due on 31 August and a partial payment of $300 is made on 16 September and the outstanding balance of $900 is paid on 10 October.

Note: The period under subsection (2) is the period beginning on 1 September and ending at the end of 9 October.

Note: Calculation of penalty in September based on unpaid amount of $1,200

Note: The penalty for each of the penalty days 1‑15 September is 80 cents (which is 0.02 divided by 30 and the result multiplied by $1,200).

Note: The total penalty for the penalty days 1‑15 September is $12 (equal to the daily penalty of 80 cents multiplied by 15).

Note: Calculation of penalty in September based on outstanding unpaid amount of $900

Note: The penalty for each of the penalty days 16‑30 September is 60 cents (which is 0.02 divided by 30 and the result multiplied by $900).