Taxable payments annual report: who must lodge by 28 August and what goes in it

Who must lodge, and by when

A taxable payments annual report (TPAR) must be lodged by 28 August each year. The report due on 28 August 2026 covers payments made to contractors between 1 July 2025 and 30 June 2026. The ATO states the deadline without qualification on its taxable payments annual report page (checked August 2026).

The duty falls on two groups: businesses that pay contractors to deliver services covered by the taxable payments reporting system (TPRS), and government entities, which report certain payments as well as grants paid to people or organisations holding an Australian business number.

"Contractor" is read broadly. It covers subcontractors, consultants and independent contractors, and the payee may operate as a sole trader, company, partnership or trust. The legal form of the payee is irrelevant to the reporting question — the service being supplied is what pulls a payment into the report.

Two features separate the TPAR from most other ATO lodgements. It is a data-matching report, not a tax return: nothing is payable with it, and the ATO uses it to test whether the contractors named have declared the income. And its date does not move with your activity statement cycle or income tax lodgement date. It is fixed at 28 August, and sits alongside — not inside — your BAS lodgement obligations. Map it into your compliance calendar as a standalone item and check it against the deadlines index each July.

The five TPRS service categories

Five service categories sit inside the taxable payments reporting system: building and construction, cleaning, courier and road freight, information technology, and security, investigation or surveillance. The ATO's work out if you need to lodge a TPAR guidance sets out the list and the tests that go with it.

If your business supplies one of these services and pays contractors to help deliver it, you are in scope. The trigger is the combination of the two: supplying a relevant service, and paying contractors for that service.

Two structural points are easy to miss:

• Courier and road freight are combined. If a business supplies both, the payments received for each must be added together when working out whether the reporting threshold is met. They are not tested separately.
• Building and construction is not subject to the percentage test. The 10% test described below applies to the other categories. A business supplying building and construction services that pays contractors for those services reports, regardless of how small a share of income that work represents.

The 10% business income test

Where TPRS services are only part of what a business supplies, the test is whether 10% or more of business income for the financial year came from a relevant service. At 10% or more, and where contractors were paid for that service, a TPAR must be lodged. Below 10%, it need not be.

The ATO sets out a three-step method:

1. Total the payments received for each relevant TPRS service across the financial year. Include payments received where employees, contractors or subcontractors performed the service on your behalf.
2. Establish your business income. A business that operated for the full financial year uses its actual income for that year. A business that operated for less than 12 months uses projected income for the next full financial year.
3. Divide and convert. Total payments received for the relevant service, divided by current or projected business income, multiplied by 100.

The test is applied afresh each financial year. A mixed business that fell below 10% last year has no standing exemption; a change in work mix can bring it into scope without any change in structure.

What you must report for each contractor

For every contractor paid, the TPAR must carry six data points. The ATO's TPAR contractor details to report guidance lists them.

Government entities report two further items: whether a statement by a supplier was provided, and the details of any grants paid to ABN holders, including the date paid and the name of the grant or grant program.

Where an invoice covers both labour and materials, report the total payment amount. The report does not require you to strip out the materials component.

Two practical controls reduce the failure rate. Check that the ABN on each invoice matches the ABN held on the contractor record, and create a new record where it does not. Confirm contractor name, ABN and GST registration against ABN Lookup before the report is compiled — a mismatched ABN is one of the fastest ways to draw a data-matching enquiry. A documented records retention policy makes the annual assembly a retrieval exercise rather than a reconstruction.

Payments that stay out of the report

Several categories are excluded. Reporting them anyway creates its own problems, because the ATO matches TPAR data against income declared by the payee.

• Payments for materials only. Where the invoice is for goods, not services.
• Incidental labour. Where an invoice lists materials and a labour component that is incidental to the supply of the materials, exclude the labour amount.
• Unpaid invoices after 30 June. Report only payments actually made on or before 30 June.
• Workers engaged under a labour hire or on-hire arrangement, including a labour hire firm supplying workers.
• Payments subject to PAYG withholding. Employee payments are reported through Single Touch Payroll or the PAYG withholding annual report, not the TPAR.
• Foreign residents for work performed overseas, and foreign residents for work in Australia where the payment is subject to PAYG foreign resident withholding. Where it is not subject to withholding, it is reportable.
• Contractors who do not quote an ABN. Amounts withheld are reported in either the TPAR or the PAYG payment summary form for no-ABN withholding, but never both.
• Payments within a consolidated or multiple entry consolidated group, which is taxed as a single entity.
• Private and domestic payments. A homeowner engaging builders for their own residence, or a business paying a contractor to clean the proprietor's home, does not report those payments.

Lodging, amending and non-lodgment advice

Paper TPAR lodgments have not been accepted since 28 August 2025. The report must now go through digital channels. That change is stated on the ATO's lodge your TPAR page.

Businesses and sole traders lodge through SBR-enabled business software, a data file built to the taxable payments annual reporting specification and transferred through Online services for business, Online services for business directly, Online services for individuals and sole traders, or a registered tax or BAS agent. Tax and BAS agents use their software or Online services for agents, where a client's outstanding TPARs appear in the "For action" screen. Government entities lodge through software or Online services for business.

Before lodging, the ATO expects you to hold the contractor's name, address, ABN and the amount paid including GST.

If you concluded you do not need to lodge, do not simply go quiet. Submit a TPAR non-lodgment advice form through ATO online services. The form allows several years to be notified at once, lets you advise that you will not need to lodge in future, records a reason, and returns a reference number that appears in your lodgment history. It is the mechanism that stops an ATO-generated overdue lodgement sitting against the ABN.

What late lodgement costs

Failure to lodge on time attracts a penalty of one penalty unit for every 28 days (or part thereof) the document is overdue, capped at five penalty units for individuals and small withholders. A penalty unit for an infringement occurring on or after 1 July 2026 is $364 (checked August 2026), per the ATO's penalty units table. A small entity that lets a TPAR run more than 113 days past 28 August 2026 therefore faces a base penalty of up to $1,820.

The base amount is multiplied for larger entities under the ATO's failure to lodge on time penalty rules:

Our penalty estimator frames the exposure, but the calculation is the ATO's and the classification depends on your withholding profile in the month the document was due.

What a TPAR does not decide

Lodging a TPAR is a reporting act. It settles nothing about the underlying relationship, and treating it as though it does is where businesses get caught.

It does not classify the worker. Whether a person is an employee or a contractor is decided under the relevant law and the terms of the engagement, not by how a payment was reported. Getting that wrong exposes the business to sham contracting risk and to superannuation guarantee liability. Test the arrangement itself using our employee or contractor classification tool, and read our explainer on the employee versus contractor test.

It does not settle payroll tax. Every harmonised state and territory payroll tax regime contains contractor provisions that can deem a payment to a contractor to be taxable wages, entirely independently of the TPAR. As at August 2026, the state revenue offices have moved past the general medical-practice amnesty phase: in Queensland, expressions of interest for the GP amnesty are closed, the amnesty covered the period to 30 November 2024, and from 1 December 2024 wages paid by a medical practice to a general practitioner are exempt from payroll tax under an administrative arrangement, per the Queensland Revenue Office. Other jurisdictions have adopted different relief settings, including conditional bulk-billing rebates and partial exemptions. None of these are national, and none can be assumed from another state's position — check the current ruling of the relevant revenue office before relying on any exemption. See our payroll tax by state summary for the jurisdictional map.

It does not replace super or payroll reporting. Employee payments run through Single Touch Payroll. Note also that the Small Business Superannuation Clearing House closed permanently on 1 July 2026 as part of the Payday Super reform and can no longer be used to make payments or download records — employers who relied on it must now pay through payroll software, a super fund service or a commercial clearing house.