If your business pays contractors to provide certain services on your behalf, you may be required to lodge a Taxable Payments Annual Report (TPAR).
The TPAR is part of the ATO’s efforts to ensure fairness in the business community by making sure all contractors report their income accurately.
If you’re unsure whether it applies to your business, now is the time to check — the due date is 28 August each year, and penalties apply for late lodgment.
What Is a TPAR?
The TPAR is a report that businesses submit to the ATO outlining payments made to contractors during the financial year. It helps the ATO match income declared by contractors with the payments they received, reducing the risk of under-reported income and ensuring a level playing field for all.
You must report the contractor’s name, address, and ABN, as well as the total amount paid, including GST and any cash payments. This is the same information you would already be using to claim tax deductions or GST credits, so it should be readily available on the invoices you’ve received from contractors.
Does It Apply to Your Business?
You may need to lodge a TPAR if:
- Your business operates in one of the following industries:
- Building and construction
- Cleaning services
- Courier or road freight
- Information technology (IT) services
- Security, investigation or surveillance services
- You’ve hired contractors (not employees) to perform these services on your behalf.
For example:
- A cleaning company that outsources regular jobs to independent cleaners.
- A construction firm that pays sub-contractors to complete part of a project.
- An online store that hires a third-party courier to deliver packages.
Even if these services are not your core business activity, you may still be required to lodge a TPAR if you’ve paid contractors to perform them. That’s a common trap for businesses who assume that because, say, they’re a retail store and not a courier company, TPAR doesn’t apply — but if they hire a courier to deliver goods to customers, that counts.
How to Lodge
Lodging your TPAR is straightforward and can be done online via:
- SBR-enabled software, or
- Online services for business (available via the ATO’s website).
You can also have your registered tax agent lodge it for you. Just make sure the information is complete and accurate to avoid issues down the track.
Important Changes to Be Aware Of
The ATO will no longer accept paper TPAR lodgments after 28 August 2025. That means all businesses will need to transition to digital reporting by then. If you haven’t already, now’s a good time to check that your accounting software supports TPAR lodgment or speak to your accountant to get set up.
Need Help?
If you’re unsure whether your payments qualify or whether your business is required to report, speak with your accountant or tax adviser. We can help you review your transactions, meet your obligations, and avoid unnecessary penalties.
Staying on top of TPAR requirements is just one more way to keep your business running smoothly and compliantly.
