Australia / Guides / TPAR: Who Has to Report Contractor Payments
Australia · guideTPAR: Who Has to Report Contractor Payments
The short answer
A business needs to lodge a Taxable Payments Annual Report (TPAR) if it operates in one of the industries the ATO has brought into the taxable payments reporting system — building and construction, cleaning, courier, road freight, information technology, or security, investigation or surveillance services — and it has paid contractors for work in that industry during the financial year. A business providing several services, where the reportable service is only part of what it does, still has to lodge if payments for that service reach 10% or more of its business income. The report is due by 28 August each year and is lodged by the business or its registered tax or BAS agent; the ATO does not require it monthly or quarterly, only annually, after the financial year it covers has closed.
Key facts — verified dates on each
Which industries are actually in scope
The taxable payments reporting system (TPRS) applies only to industries the ATO has named, not to every business that engages contractors. As at this guide's verification date, those industries are building and construction; cleaning services; courier services and road freight transport; information technology services; and security, investigation or surveillance services. Government entities have a related but separate reporting obligation covering service payments and grants.
A business outside those industries generally has no TPAR obligation, no matter how many contractors it pays — but the test is what the contractor was paid to do, not what the paying business calls itself. A retailer that also runs a subcontracted installation or delivery arm can fall into scope for that portion of its activity even though installation or delivery is not its main trade. The industry list has been expanded more than once since TPAR started with building and construction alone, so confirm the current list against the ATO page rather than an older summary.
The 10% rule for businesses that only partly work in a reportable industry
Many businesses provide a reportable service alongside other, non-reportable work. The ATO handles this with a threshold: if payments received for TPRS services make up 10% or more of the business's total GST-exclusive income for the financial year, a TPAR is required covering the contractor payments made for that reportable work. Below 10%, none is required for that year.
This is assessed on income received for the reportable service, not on what is paid to contractors, and it is assessed fresh each financial year — a business can cross the threshold in one year and drop below it the next. Where a business provides more than one reportable service, income from those services is combined before testing it against the 10% mark, which means a revenue split by service line has to exist before the reporting question can be answered.
What has to exist in the records all year, not assembled in August
A TPAR reports, for each contractor paid during the financial year, the contractor's ABN, name and business address, the total gross amount paid (including any GST), and the GST component of that amount. None of it is optional — a contractor invoice missing an ABN, or a payment coded to a generic "subcontractors" account without the payee split out, turns into a reconciliation problem in August that a clean accounts payable process would never have created.
The data has to reconcile to what was actually paid during the financial year, not to invoices raised — a contractor invoiced in June but paid in July belongs to the payment-date year. Payments for materials only, with no labour component, are generally excluded from reporting; a mixed invoice needs its labour portion identified at the time it is coded, which is far easier than reconstructing it from a stack of invoices months later.
The 28 August due date and who lodges it
TPAR is an annual report covering payments made during a financial year (1 July to 30 June), due by 28 August following the end of that year — so the report for 1 July 2025 to 30 June 2026 is due 28 August 2026. There is no built-in extension mechanism the way there is for some other lodgments; a business that needs more time works that through its registered agent or the ATO directly.
The report is lodged by the business itself through the ATO's online services, or by its registered tax or BAS agent through their practice software — the channel used doesn't change the underlying data requirement. A business with nothing to report for a year, for example because it fell under the 10% threshold, generally still needs to submit a non-lodgment advice rather than letting the obligation lapse silently.
What happens when it is missed or wrong
A TPAR lodged late is subject to the ATO's standard failure-to-lodge penalty, which accrues in fixed 28-day blocks from the due date up to a capped number of penalty units, calculated at whichever penalty unit dollar value applies on the date the penalty is applied — see the figures below, since that value is indexed and has changed more than once in recent years. A report lodged on time but with materially wrong contractor details can also draw attention, since the whole purpose of TPAR is letting the ATO cross-check what a contractor reports as income against what businesses report having paid them — so a business's errors don't stay contained to that business.
Where the record-keeping ends and the lodgment begins
CapEasy's bookkeeping and accounts payable support keeps contractor payment records — ABN, business details, and payment amounts split by GST — reconciled through the year, so the data a TPAR needs is already accurate rather than reconstructed under deadline pressure in August. Determining whether a specific payment is reportable, preparing the TPAR itself, and lodging it with the ATO is done by the business or its registered tax or BAS agent, not by CapEasy.
The figures, and when we checked them
These numbers change by year or by notification. Each one shows the date we last verified it against the source — if that date looks old, check the source before relying on it.
Questions on this
Does every business that pays contractors need to lodge a TPAR?
No. It applies only to businesses in the industries the ATO has named — building and construction, cleaning, courier, road freight, IT, and security, investigation or surveillance services — and only where the business has paid contractors for work in that industry.
What if reportable work is only a small part of the business?
A TPAR is required only if income from the reportable service reaches 10% or more of total GST-exclusive business income for the financial year. The test runs fresh each year, so the answer can change as the business mix shifts.
What information does a TPAR actually report about each contractor?
ABN, name and business address, the total gross amount paid during the financial year (including any GST), and the GST component of that amount — tracing back to payments made, not invoices issued.
When is the TPAR due?
By 28 August following the end of the financial year it covers. There is no monthly or quarterly TPAR — it is filed once, annually.
Who lodges the TPAR — the business, or its accountant?
Either. The business can lodge it directly through the ATO's online services, or its registered tax or BAS agent can lodge it through their practice software. The channel doesn't change what data has to be accurate going in.
What happens if a business has nothing to report for the year?
A business that falls under the 10% threshold, or otherwise has no TPAR obligation for that year, generally still needs to submit a non-lodgment advice rather than letting the obligation lapse silently.
Are payments for materials only included in a TPAR?
Payments for materials alone, with no labour component, are generally excluded. A mixed invoice needs its labour portion identified and reported; where the treatment is unclear, that call sits with the business's tax agent.
What is the penalty for lodging a TPAR late?
The ATO's standard failure-to-lodge penalty applies, accruing in 28-day blocks from the due date up to a capped number of penalty units. The dollar value of a penalty unit is indexed periodically — see the figures above for the current rate.
Does CapEasy prepare or lodge a TPAR?
No. CapEasy's bookkeeping and accounts payable support keeps contractor payment records reconciled through the year. Determining reportability, preparing, and lodging the TPAR is done by the business or its registered tax or BAS agent.
Can a business be in scope for TPAR because of one subcontracted service line?
Yes. A retailer running a subcontracted installation or delivery arm can trigger a TPAR obligation if that arm's income reaches the 10% threshold of total business income, even though installation or delivery isn't the business's main trade.
Primary sources
- ATO — Taxable payments annual report (TPAR)
- ATO — Work out if you need to lodge a TPAR
- ATO — Lodge your TPAR
- ATO — Payments businesses need to report in their TPAR
- ATO — Penalty units
Last reviewed 2026-08-14. Statutes and schedules change — the sources above are authoritative, this page is orientation.
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