At tax time you often see ads for a “same day tax refund” or “instant tax refund”. That might sound like a good idea, to get your tax refund today, instead of waiting.
But the truth is, a “same day tax refund” is not really what the name suggests.
Instant Tax Refunds are Usually a Rip-Off – Here’s Why
First of all, most Australians wait only 6-10 business days for their ATO tax refund. If you use a tax agent (like over 70% of Australians do), the agent sends the money straight into your bank account. All good.

Sometimes you might want (or need) your tax refund even faster. If you are in a big hurry, and you go for an “instant tax refund”, you could find yourself in serious financial strife. Because in fact, there’s no such thing as an instant tax refund.
Tax refunds are issued by the ATO. When you sign a “same day tax refund” contract, what you get is not an instant tax refund – typically it’s a high interest, short-term loan, often with high fees and costly late charges hidden inside a legal contract.
Pay Close Attention to the Numbers
Instant tax refund agents can take as much as 20% or more out of your refund, right from the start. They may also charge you a combination of fees and interest that takes an even bigger bite out of your wallet. On top of that, their basic tax return fees are often higher than you’d pay for good, popular tax agent services.
Making it worse, if the ATO delays your refund – a delay that’s out of your control – you could pay additional interest and fees. In some cases, you could wind up paying more than your total tax refund – straight back to that “instant refund” tax loan agent.
It can get even worse than that!
If the ATO doesn’t give you the refund you expected, then you owe your entire “instant refund” plus all the fees and interest (usually over a thousand dollars) and you have to pay it back to the company right now – or else those high interest rates and penalty fees start to kick in. This can get ugly for you, especially if you are on a lower income and you can’t pay it back right away. If you need time to pay it back, you might discover your instant tax refund costs you more than your entire ATO tax refund.
Instant tax refund example:
“Phillip needs a mountain bike”
Phillip is expecting a $1400 tax refund from the ATO. He wants cash today, to buy a new mountain bike.
Phillip visits a same-day tax refund office. At first, the fees don’t look too scary…
- 10% of the tax refund (a realistic example)
- $120 basic tax return fee plus a typical $30 fee for deducting the fees later. (That’s common, but it can go much higher).
Phillip wants his bike now, because it’s on sale at a $200 discount. So he signs the agreement and walks away with a $1000 cash “same day tax refund”. (The loan is usually quite a bit lower than your total estimated tax refund.)
At this point, Phillip only thought about the basic $120 fee, but in fact the minimum Phillip will pay in fees is $290. That is a very high fee for a basic tax return, and there might be more fees coming Phillip’s way very soon…
Phillip gets his $1000 cash, gets his mountain bike and he has not paid any fees out of pocket – yet.

Phillip hits some tax turbulence:
Later, Phillip got a message from the ATO: His $1400 tax refund was withheld. He forgot to declare his Centrelink debt when he did his tax return (a common issue). Phillip’s tax refund went straight from the ATO to Centrelink and he will get nothing. No tax refund for Phillip.
But wait. Didn’t Phillip already get a tax refund?
Nope. He got a loan. And now things are going to get messy.
Now, Phillip owes money back to the tax refund business for the loan. How much does he owe?
- $1000 for the “instant refund” loan
- plus $290 in fees
- that makes the total $1290
Phillip doesn’t have $1290 in the bank. He can only afford to repay $100 a month. What happens now?
The fine-print on Phillip’s instant tax refund contract says he can make monthly repayments and he’ll have to pay an additional 4% of his original loan, per month.
Does that sound okay to you? He can pay it off in just over a year, right?
WRONG.
Every month, the loan agent charges an extra 4% of the original loan = $40 per month.
And Phillip also gets hit with a $12 late fee every month. (It is “late” because the agreement said his loan was due 30 days from signing, when he expected his ATO refund.)
Phillip makes his $100 monthly payments. Each month, $52 gets sucked up by interest and fees. Only $48 goes toward his loan.
In the end, Phillip’s $100 monthly payments will continue for 27 months.
Phillip has to pay back his $1000 loan PLUS another $1694 in fees and interest. $2694 in total!
This fictional example is not a worst-case example. A worse case could spell financial ruin for a taxpayer. That might involve:
- a bigger loan,
- a person who could only afford $75 per month (in Phillip’s case, that would mean almost five years of payments costing over $3000 in fees and interest), or
- a same-day refund agent that charges even higher fees – yes, they are out there, waiting to trap people who don’t check the fine print.
The verdict on same day tax refunds
As we said before, most Australians receive their tax refund within 6–10 business days after submitting their return.
Do you really need an instant tax refund? If you are considering it, ask yourself: “Can I wait about a fortnight like everyone else?”
If you need money instantly, there are safer ways to borrow. Based on our review of the fees charged by same-day-refund companies, it appears many of them are a rip-off. And they’re a rip-off that could cost you money month after month, for a long time. Even credit cards, which have terrible fees and interest rates, might be cheaper and safer than a same-day tax refund.
A good tax agent service can often save you money and boost your refund.
A normal, popular online tax agent like Etax Accountants is different to a same-day “instant tax refund” agent. The fees are reasonable, the service is professional, and there’s no chance you’ll be charged interest fees or late charges.
A same-day refund agent will, in most cases, cost you more than it’s worth. Don’t risk it all for a same-day tax refund loan.
The Safer Way to do Your Tax Return
Over 70 per cent of Australians’ tax returns are done with a tax agent – for the confidence of knowing the return was done right, getting help improving your refund, and the convenience some agents like Etax offer with nice online systems that save you time.
You can do your tax return quickly, easily, safely, and for a low fee by visiting an online tax agent service such as Etax.com.au.
At Etax, the latest online tax return starts at only $78.49. If you prefer for your fee to be taken from your tax refund later, the fee from refund service is just $27.50. You can never be charged interest at Etax.com.au – click here to learn more about low fees at Etax. And you get accountants working on your side: your tax return is reviewed by our tax accountants to make sure that everything is correct, and that you’ve claimed all the deductions you’re entitled to.
After your return is lodged at the ATO, you can generally expect to receive your refund from the ATO in under 14 days. Not only will you avoid the staggering fees of a same day tax return service – you might also get more money in your refund, and you’ll enjoy peace of mind knowing your return was done properly.