TPAR: who needs to lodge, what to report and the 28 August due date

If your business pays subcontractors, there is a good chance the ATO wants an annual list of who you paid and how much. The Taxable payments annual report (TPAR) catches many builders, cleaners, couriers and IT businesses by surprise — often years after they should have started lodging. Here is how the system works, who it applies to and how to get it done without drama.

What the TPAR is for

The Taxable payments reporting system was introduced so the ATO could see contractor income from the paying side. The data is matched against the contractors' own tax returns, and since Tax Time 2026 it is pre-filled into the returns of sole-trader contractors who provide these services. The ATO is open about the purpose: to find contractors who are not declaring all their income, and to stop businesses that do the right thing being undercut by competitors who don't.

Contractors for this purpose include subcontractors, consultants and independent contractors, whether they operate as sole traders, companies, partnerships or trusts. If the worker is an employee, they are not in the TPAR — their wages are reported through Single Touch Payroll instead.

Who needs to lodge

The reporting obligation attaches to the services your business provides, not simply to the services you buy. The industries covered are:

• building and construction — the original and broadest category, covering everything from site preparation, concreting and bricklaying to electrical, plumbing, painting, cabinet making, landscaping construction, engineering, surveying and project management;
• cleaning;
• courier and road freight;
• information technology; and
• security, investigation or surveillance.

Building and construction has its own test. You are treated as primarily in that industry if, in the current year, 50% or more of your business income or business activity comes from building and construction services — or if 50% or more of your income did in the previous year. If that is you, and you pay contractors for building and construction services, you lodge. A cabinet maker who also sells carvings, for example, reports in any year the cabinet-making side reaches half of income, and in the following year as well.

For the other services, a 10% test applies. Add up the payments you received for the relevant service during the year and divide by your total business income (or your projected income if you have been trading less than twelve months). If the result is 10% or more, and you paid contractors to deliver that service, you must lodge. Courier and road freight receipts are combined for the test. A business that is 8% cleaning and 92% retail does not lodge; a business that is 15% cleaning does.

Passing the test once does not settle the question forever. Work it out each financial year, because the mix of your income changes.

What to report for each contractor

For every contractor you paid for the relevant service, the report needs:

• their ABN (if it changed during the year, include each ABN);
• their name — business name or individual's name;
• their address;
• the gross amount paid for the financial year, including GST and any tax withheld, in whole dollars; and
• the total GST included in those payments, and any tax withheld where no ABN was quoted.

Where an invoice includes both labour and materials, you report the whole payment. The report is prepared on a cash basis: payments made on or before 30 June go in; invoices still unpaid at 30 June go in next year's report. The ATO may also ask for a contractor's phone number, email and bank details, so keep them on file.

Check each contractor's ABN against ABN Lookup when you set them up as a supplier. A wrong ABN on your report is a wrong match on the ATO's side, and it is your report that gets queried.

What you don't report

Leave out:

• payments for materials only, and invoices where the labour is incidental to the supply of materials (a hardware store installing one of ten taps to show you how);
• employees paid through PAYG withholding — they belong in STP;
• workers supplied under a labour-hire or on-hire arrangement;
• payments to other members of the same consolidated group;
• payments to foreign residents for work performed overseas, and payments subject to foreign resident withholding; and
• private and domestic payments — a homeowner managing their own build, or a cleaning business paying someone to clean the owner's house from a personal account.

If a contractor doesn't quote an ABN you may have to withhold tax from the payment. Report the withheld amount either in the TPAR or on the annual withholding-where-ABN-not-quoted summary — not both.

How to lodge

Paper TPAR forms stopped being accepted after 28-08-2025, so lodgment is online only. The practical options are:

• Accounting software. SBR-enabled packages — Xero, MYOB, QuickBooks and others — can build and lodge the report directly, provided contractor bills were flagged as reportable through the year. The pain usually comes from not having tagged suppliers from day one, so set that up when you onboard each contractor.
• Online services for business (with a Digital ID and RAM) or Online services for individuals and sole traders: select Lodgments, then Taxable payments annual report. Drafts can be saved and resumed, and receipt IDs appear under History.
• Your registered tax or BAS agent lodges for you through Online services for agents or through practice software.

If your business is in a TPRS industry but had no contractor payments for the year, submit a TPAR non-lodgment advice through online services. It stops the reminder letters and records why nothing was lodged. If you later find an error, a lodged TPAR can be amended.

Penalties for not lodging

A late or missing TPAR can attract the ATO's failure to lodge on time penalty, which accrues per 28-day period overdue, with multipliers for medium and large withholders. The ATO generally doesn't penalise isolated late lodgments and will warn you first — but it specifically notes that the usual concession for returns resulting in a refund or nil result does not extend to third-party data reports such as the TPAR. If you supplied your agent everything needed to lodge on time, safe harbour may apply.

Record-keeping that makes it easy

Keep, for each contractor, their name, address and ABN, and the amounts you paid including GST. Store contractor invoices for five years, and keep the worksheet or software report you used to prepare each TPAR. Record which entity actually invoiced you — the report must match the ABN that was paid.

What SMT does

We work out whether the 10% or 50% test catches you, set up reportable-contractor tagging in Xero or MYOB so the report assembles itself, reconcile contractor payments to the ledger before lodging, and lodge the TPAR or non-lodgment advice as your registered agent. For our tradie and transport and logistics clients it sits alongside the BAS cycle, so the August deadline is already in the calendar.

Sources

• ATO — Taxable payments annual report (TPAR)
• ATO — Work out if you need to lodge a TPAR
• ATO — Building and construction services
• ATO — Payments businesses need to report in their TPAR
• ATO — TPAR contractor details to report
• ATO — Lodge your TPAR
• ATO — Taxable payments reporting and contractors
• ATO — Failure to lodge on time penalty