If your business engages contractors or subcontractors, you may need to lodge a Taxable Payments Annual Report (TPAR) with the Australian Taxation Office (ATO).
A TPAR reports payments made to contractors for certain services and helps the ATO ensure contractors are correctly reporting their income.
TPAR obligations can apply to businesses that pay contractors to provide certain services on their behalf including:
Generally, payments made to contractors for relevant services during the financial year need to be reported.
TPAR reporting is generally based on payments made, rather than simply invoices received. Therefore, an invoice that remains unpaid at 30 June is generally reported when it is paid.
Where an invoice includes both labour and materials, the total payment may be reportable. However, payments for materials only are generally not reportable.
Businesses generally need to provide contractor details including:
Keeping accurate contractor records throughout the year can make TPAR preparation much easier.
Not every contractor payment needs to be included in a TPAR. Some important exclusions and exemptions include:
For certain businesses providing courier or road freight, IT, and security, investigation or surveillance services, an exemption may apply where payments received for the relevant service are less than 10% of the business’s current or projected GST turnover.
This exemption needs to be assessed based on the relevant service and the business’s GST turnover. Businesses should refer to the ATO’s guidance on taxable payments reporting when determining whether the exemption applies.
Payments made solely for materials are generally not required to be reported.
TPAR reporting generally applies to payments actually made during the financial year. An invoice that remains unpaid at 30 June is generally not included until the payment is made.
Payments already subject to PAYG withholding, such as payments to employees, are generally not reported in a TPAR.
This makes it important for businesses to correctly determine whether a worker is an employee or contractor.
Certain payments made within a consolidated group or Multiple Entry Consolidated (MEC) group are excluded from TPAR reporting.
Payments made by an individual for private or domestic purposes, rather than as part of a business, are generally not subject to TPAR reporting.
For the 2026 financial year the TPAR report was due by 28 August 2026, if you believe you need to lodge a report or would like more information on TPAR reporting, please feel free to contact us.
TPARs can be lodged electronically using:
Businesses should ensure their contractor information and payment records are complete before lodging.
TPAR compliance is an important annual obligation for businesses that engage contractors in specified industries.
The key is to look at the services your business provides, the services performed by contractors, the payments made and whether an exemption applies.
Businesses should maintain accurate contractor records throughout the year and review their TPAR obligations before the annual deadline.
For the most up-to-date requirements, businesses should refer directly to the ATO’s Taxable Payments Reporting System
Written for you by Amanda Bonavita
The information contained on this website and in this article is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser. Taxation, legal and other matters referred to on this website and in this article are of a general nature only and are based on our interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
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