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    TaxKiln

    TPAR: Taxable Payments Annual Report

    Which industries must lodge a Taxable Payments Annual Report, the 28 August deadline, what you report, how ATO data matching catches non-compliance, and penalties for late or missing lodgement.

    The Taxable Payments Annual Report (TPAR) is a mandatory annual report to the ATO listing payments made to contractors in covered industries during the financial year, established under Subdivision 396-B of Schedule 1 to the Tax Administration Act 1953. For 2025-26, TPAR applies to businesses paying contractors in building and construction, cleaning, courier, road freight, information technology, and security services. The report is due by 28 August following the end of the financial year and the ATO cross-matches reported payments against contractors' income tax returns and BAS to detect undeclared income.

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    Guidance, not advice. We explain the rules, we don't assess your situation. Always seek financial or tax advice from your accountant, or contact ATO. Read our editorial scope →

    Who must lodge a TPAR

    You must consider TPAR if you hold an ABN and pay contractors to provide services on your behalf in a covered industry. For 2025-26, the obligation covers building and construction services, cleaning services, courier services, road freight services, information technology services, and security, investigation and surveillance services. Government entities must also lodge for relevant contractor payments. The threshold is not binary: businesses whose income from these services forms a substantial proportion of total turnover should treat themselves as within the TPRS net. Many businesses mistakenly believe they are excluded because their primary industry is different.

    What you must report for each contractor

    For each reportable contractor, your TPAR must include their ABN, their legal name (and trading name if applicable), their main business address, the total gross payments for the year including GST, the total GST included in those payments, and any tax withheld where the contractor did not quote an ABN. Where an invoice includes both labour and materials, the whole payment is typically treated as for services and is reportable. Payments for goods only, with no services component, are generally not reportable. Payments to employees (reported via STP) are excluded.

    How to lodge and the 28 August deadline

    TPAR is due by 28 August following the end of the financial year. For 2025-26 payments (1 July 2025 to 30 June 2026), the deadline is 28 August 2026. Lodge using Online Services for Business (the ATO Business Portal), SBR-enabled or accounting software (Xero, MYOB, and other compliant systems can generate TPAR directly from your payables data), a registered tax or BAS agent, or in limited cases an ATO paper form. Cloud-based accounting systems that capture supplier ABNs, GST treatment, and payment history are the easiest way to maintain TPAR-ready data year-round rather than scrambling in August.

    ATO data matching and what happens when numbers do not match

    TPAR is a central pillar of the ATO's shadow economy and cash compliance program. The ATO uses TPAR data to pre-fill and cross-check contractors' income tax returns and BAS, comparing what payers report paying with what contractors declare receiving. Where a contractor's declared income is significantly less than the total of TPAR-reported payments from all their clients, this triggers ATO review letters, targeted audits, or formal compliance action. The data flows both ways: if your TPAR figures do not reconcile with your own BAS and income tax return, the ATO will query the discrepancy with you as well.

    Common mistakes and risk areas

    The most frequent TPAR errors fall into five categories. First, assuming your industry is not covered when a substantial proportion of your income does relate to covered services. Second, reporting net-of-GST amounts instead of gross payments including GST, creating discrepancies. Third, failing to report payments where invoices include both labour and materials, treating them incorrectly as goods-only. Fourth, missing IT services obligations, particularly where businesses that are not IT companies nonetheless engage IT contractors or derive significant income from IT services. Fifth, incomplete or inaccurate contractor details: missing ABNs, names not matching ABN records, or incomplete addresses.

    Statute references

    • Tax Administration Act 1953, Schedule 1, Subdivision 396-B (taxable payments reporting)
    • Tax Administration Act 1953 (Failure to Lodge penalties)
    • ATO Taxable Payments Annual Report guide

    Frequently asked questions

    Do I need to lodge a TPAR if my business is not primarily in a covered industry?+
    Possibly. If a substantial proportion of your income relates to TPAR-listed services (commonly 10% or more of total turnover, or 50% for building and construction in some practical guidance), you are generally expected to lodge. A retailer that outsources deliveries through courier contractors, or a property management firm that subcontracts cleaning, may have TPAR obligations even though their primary business label is something else. Assess based on the proportion of income from covered services, not the label on your ABN registration.
    Do I report gross payments including GST or net amounts?+
    Report the total gross amount paid including GST, plus a separate field for total GST included in those payments. Use the full invoice total paid including GST, not the net-of-GST figure. Where the contractor is not GST-registered, the gross and net figures will be the same. Reporting net instead of gross is one of the most common TPAR errors and creates discrepancies that trigger ATO review letters.
    What happens if I lodge TPAR late or not at all?+
    Late or non-lodgement attracts a Failure to Lodge (FTL) penalty under the TAA 1953. From March 2022 onwards, the ATO has actively applied FTL penalties to organisations with overdue TPAR obligations. Penalties increase the longer the report remains outstanding and can be applied per late report. Persistent non-compliance also raises your overall ATO risk profile, triggering closer scrutiny of your BAS, income tax returns, and PAYG reporting.
    Are payments to employees reportable on TPAR?+
    No. Payments to employees are reported through Single Touch Payroll (STP), not TPAR. TPAR covers payments to contractors, subcontractors, consultants, and independent contractors for services in a covered industry. If you are uncertain whether a worker is an employee or contractor, the distinction has consequences well beyond TPAR, including superannuation guarantee, PAYG withholding, and workers' compensation obligations.

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