The Taxable Payments Annual Report (TPAR) is an industry-specific report through which businesses inform the ATO of the total payments made to contractors for services in that financial year. This information is then used by the ATO to match the contractors’ income declarations to improve their compliance efforts.


The ATO estimates that around 280,000 businesses are required to lodge a taxable payments annual report (TPAR) for the 2019–20 year, following the regime’s extension last year to businesses providing road freight services, information technology services, and security, investigation or surveillance services.

Businesses providing building and construction, cleaning, or courier services are also required to lodge a TPAR.

With the annual 28 August deadline now well overdue, the ATO has confirmed that more than 60,000 businesses have yet to lodge their TPAR, with failure-to-lodge penalties looming.

ATO assistant commissioner Peter Holt has urged these businesses to lodge immediately, noting that the taxable payments reporting system (TPRS) aims to create a level playing field for contractors.

“As any good tradie will tell you, the spirit level is a critical tool to ensure construction work is being done on the level,” Mr. Holt said.
“I like to think of the TPRS as a bit of a spirit level for tax obligations. Our role is to make sure the ‘bubble’ is centered as much as possible to keep things on the level and fair for everyone.”

Mr. Holt also believes that many more businesses might be captured under the TPRS for the first time ever after COVID-19 forced businesses to pivot to a delivery service model.

“Many restaurants, cafés, grocery stores, pharmacies and retailers have started paying contractors to deliver their goods to their customers,” Mr. Holt said.
“These businesses may not have previously needed to lodge a TPAR. However, if the total payments received for these deliveries or courier services are 10 per cent or more of the total annual business income, you’ll need to lodge.”


Bookkeeping Tip:

Always make sure you have the name, ABN and business address of contractors you employ. Additionally make sure you check the veracity of their ABN here and don’t pay the contractor without a valid tax invoice matching their GST status on the ABR register.