ATO and Revenue NSW garnishee notices both redirect money from third parties, but they apply to different debts. The ATO usually recovers federal tax debts such as GST, PAYG and income tax, while Revenue NSW recovers state debts such as payroll tax, land tax, transfer duty and fines.
On This Page
- Introduction
- The Main Difference
- What Debts Can Each Authority Recover?
- How to Tell Whether the Notice Came From the ATO or Revenue NSW
- Can You Challenge or Negotiate a Garnishee Notice?
- Quick Comparison
- What Happens If You Ignore a Garnishee Notice?
- What Should You Do After Receiving a Garnishee Notice?
- FAQs
Introduction
If you’ve received a garnishee notice, one of the most important questions to ask is whether it came from the ATO or Revenue NSW. Although both agencies can recover money directly from bank accounts and other third parties, they do so under different powers and for different reasons. Knowing the difference can help you respond more effectively.
This blog explains the similarities and key distinctions between ATO and Revenue NSW garnishee notices.
The Main Difference
The main difference between an ATO garnishee notice and a Revenue NSW garnishee notice is the type of debt being recovered.
The Australian Taxation Office (ATO) generally deals with federal tax debts, such as income tax, Goods and Services Tax (GST), Pay-As-You-Go (PAYG) withholding, Superannuation Guarantee Charge (SGC), penalties and interest.
Revenue NSW deals with NSW state debts, such as payroll tax, land tax, transfer duty, fines and other state-administered liabilities.
Both authorities may direct a third party, such as a bank, employer, customer or debtor, to redirect money. However, the issuing authority, legal framework, debt type and response pathway may differ.
As a general rule, if the debt relates to a federal tax obligation, the ATO is likely to be involved. If it relates to a NSW state tax or government charge, Revenue NSW may be the recovery authority.
What Debts Can Each Authority Recover?
ATO Garnishee Notices
An ATO garnishee notice is generally used to recover unpaid federal tax debts. These may include:
- income tax debts
- GST liabilities
- PAYG withholding debts
- Superannuation Guarantee Charge liabilities
- tax-related penalties
- general interest charge or other interest amounts
- debts arising from unpaid or overdue Business Activity Statement obligations
For businesses, ATO garnishee notices often arise where tax debts have remained unpaid for some time, lodgements are overdue, payment arrangements have defaulted, or the ATO considers that firmer recovery action is required.
Revenue NSW Garnishee Notices
A Revenue NSW garnishee notice is generally used to recover NSW state-based debts. These may include:
- payroll tax debts
- land tax debts
- transfer duty, commonly known as stamp duty
- unpaid fines and penalties
- state government charges
- other debts administered by Revenue NSW
For individuals and businesses in New South Wales, Revenue NSW recovery action may arise from unpaid state tax assessments, overdue fines, unresolved duties, failed payment arrangements, or other amounts owed under NSW revenue laws.
How to Tell Whether the Notice Came From the ATO or Revenue NSW
Start by checking the issuing authority named on the notice.
An ATO garnishee notice will usually refer to the Australian Taxation Office and federal tax debts.
A Revenue NSW garnishee notice will usually refer to Revenue NSW and a NSW state-based debt.
You should also check:
- the reference number or account details listed on the notice
- the type of debt being recovered
- the legislation or authority referred to in the document
- the payment instructions
- the contact details provided for queries or payment arrangements
The process for payment arrangements, hardship requests, objections or reviews may differ depending on whether the notice came from the ATO or Revenue NSW.
Can You Challenge or Negotiate a Garnishee Notice?
In some cases, you may be able to challenge, vary or negotiate a garnishee notice, but the process depends on which authority issued it and why.
If the notice came from the ATO, options may include:
- checking the tax debt,
- objecting to the underlying assessment,
- negotiating a payment arrangement,
- requesting variation due to hardship or
- seeking professional advice about recovery action.
If the notice came from Revenue NSW, the available options may depend on whether the debt relates to:
- payroll tax,
- land tax,
- transfer duty,
- fines or another NSW government liability.
You may need to review the assessment, request a payment arrangement, seek hardship consideration or use the relevant Revenue NSW review process.
In any case, you should not ignore the notice, because the third party that receives it may be legally required to comply.
Quick Comparison
| Comparison point | ATO garnishee notice | Revenue NSW garnishee notice |
| Issuing authority | Australian Taxation Office | Revenue NSW |
| Type of debt | Federal tax debts | NSW state taxes, duties, fines and government debts |
| Common examples | Income tax, GST, PAYG withholding, Superannuation Guarantee Charge, penalties and interest | Payroll tax, land tax, transfer duty, fines, penalties and other NSW revenue debts |
| Who may receive the notice | Banks, employers, customers, debtors, tenants, payment providers or other parties holding or owing money | Banks, employers, customers, debtors or other parties holding or owing money, depending on the debt and recovery process |
| What the notice does | Requires the third party to pay money to the ATO instead of the taxpayer | Requires the third party to pay money to Revenue NSW instead of the debtor |
| Typical reason it is issued | Unpaid tax debt, failed payment arrangements, poor lodgement compliance or limited engagement with the ATO | Unpaid NSW tax, overdue fines, unpaid duties, unresolved assessments or failed payment arrangements |
| Relevant legal framework | Generally linked to federal tax recovery powers under the Taxation Administration Act 1953 | Generally linked to NSW revenue and debt recovery laws, including the Taxation Administration Act 1996 (NSW) and other applicable NSW legislation |
| Can it affect business cash flow? | Yes. It may redirect bank funds, customer payments, merchant receipts or other business income | Yes. It may redirect funds held by banks, customers, debtors or other third parties |
| Can it be negotiated or varied? | Potentially, depending on the debt, compliance history, payment proposal, hardship position and ATO discretion | Potentially, depending on the type of NSW debt, review rights, payment arrangement options and Revenue NSW policies |
In short, the main difference is the type of debt being recovered. The ATO generally deals with federal tax debts, while Revenue NSW deals with NSW state-based debts.
What Happens If You Ignore a Garnishee Notice?
Once a valid notice has been issued, the bank, employer, customer, or other third party receiving it is generally required to comply.
Ignoring the notice can result in:
- Funds being recovered directly from your bank account, wages, or amounts owed to you by customers.
- The debt remaining outstanding if the garnished amount does not fully repay what is owed.
- Additional interest and penalties continuing to accrue, where applicable.
- Cash flow difficulties for individuals and businesses as funds are redirected to the government authority.
- Further recovery action being taken if the debt remains unpaid.
- Missed opportunities to negotiate payment arrangements, seek hardship relief, or resolve the issue before it escalates.
The sooner you address a garnishee notice, the more options you are likely to have available to manage the debt and minimise further recovery action.
What Should You Do After Receiving a Garnishee Notice?
If you receive a garnishee notice, the first step is to identify which authority issued it. An ATO garnishee notice and a Revenue NSW garnishee notice may have a similar practical effect, but the debt type, contact process, review options and payment arrangement pathways may differ.
Start by reviewing the notice carefully. Check whether it came from the ATO or Revenue NSW, what debt it relates to, how much is being recovered, and which bank account, wage payment, customer payment or other income source may be affected.
You should also:
- confirm the underlying debt and whether the amount is correct
- check whether any payment arrangements have already defaulted
- review recent correspondence from the ATO or Revenue NSW
- assess the impact on your cash flow, wages, bank account or business income
- consider whether a payment arrangement, hardship request, objection or review option may be available
- seek professional advice before the notice causes further financial or operational disruption
Do not assume the notice can be ignored because it has been sent to a bank, employer, customer or other third party. Once a valid garnishee notice has been issued, the recipient may be legally required to redirect money to the issuing authority.
Acting quickly can help you understand your rights, confirm your obligations, and explore whether the notice can be varied, withdrawn or managed through another arrangement.
At Halo Advisory, we work with you — the director. Financial expert Greg Bartels offers a no-obligation consultation to help you understand your position, assess potential risks, and explore practical options for resolving outstanding debts before recovery action escalates. Get in touch today.
FAQs
If I move interstate, can Revenue NSW still pursue a NSW debt?
Yes. Relocating outside New South Wales does not automatically prevent Revenue NSW from pursuing outstanding state-based debts or taking recovery action where permitted by law.
Can a company receive an ATO garnishee notice for GST debts and a Revenue NSW garnishee notice for payroll tax debts?
Yes. A business with both federal and state tax liabilities may be subject to separate recovery action by each authority for different debts.
Are payroll tax debts dealt with by the ATO or Revenue NSW?
Payroll tax is state tax. In New South Wales, unpaid payroll tax liabilities are generally administered and recovered by Revenue NSW rather than the ATO.
Are unpaid GST debts dealt with by Revenue NSW?
No. GST is a federal tax administered by the ATO. Recovery action relating to unpaid GST liabilities is generally undertaken by the ATO.
Can the same debt be pursued by both the ATO and Revenue NSW?
Generally, no. Each authority is responsible for collecting specific categories of government debt. However, a taxpayer may owe separate debts to both authorities at the same time.
Does receiving a garnishee notice mean legal action has already started?
Not always. A garnishee notice is an administrative debt recovery tool and can often be issued without court proceedings. However, it generally indicates that the matter has progressed beyond routine collection efforts.
Are Director Penalty Notices (DPNs) relevant to Revenue NSW debts?
Generally, no. Director Penalty Notices are measures used by the ATO to recover certain company tax liabilities, such as PAYG withholding and superannuation obligations. Revenue NSW has different recovery mechanisms for state-based debts.
Can Revenue NSW issue a garnishee notice for unpaid land tax?
Yes. Unpaid land tax is one of the state revenue debts that may lead to recovery action by Revenue NSW, including the use of garnishee notices.
Does an ATO garnishee notice only apply to tax returns that haven’t been lodged?
No. Garnishee notices are usually issued for unpaid tax debts rather than simply unlodged returns. However, ongoing lodgement failures can contribute to debt assessments and recovery action.
Which authority is more likely to deal with unpaid business activity statement (BAS) debts?
The ATO. BAS liabilities typically include GST, PAYG withholding, and other federal tax obligations that fall within the ATO’s responsibility.
Can a dispute about the debt affect whether a garnishee notice is issued?
Potentially. If a debt is under review or subject to an objection process, this may influence recovery action. However, the effect will depend on the specific circumstances and the authority involved.
Does the issuing authority affect the hardship options available?
Yes. Both the ATO and Revenue NSW may consider hardship circumstances, but they operate under different policies and legislative frameworks when assessing requests for relief or payment arrangements.
