Your guide to Taxable Payments Annual Report (TPAR)

What is a TPAR?

A Taxable Payments Annual Report is a report lodged with the ATO that details payments you made to contractors or subcontractors during the financial year (1 July to 30 June).

The ATO uses TPAR data to match what you report against what your contractors declare as income. If the numbers don’t line up, the ATO investigates – and that investigation usually starts with your contractor, not with you.

Does your business need to lodge one?

You are required to lodge a TPAR if your business mainly operates in one of the following industries and you pay contractors to perform services:

• Building and construction – including trades such as plumbing, electrical, carpentry, painting, landscaping, and project management.
• Cleaning services – commercial and residential cleaning contractors.
• Couriers and road freight – including food delivery services and freight.
• Information technology (IT) – software development, web design, IT consulting, and systems integration.
• Security, investigation, or surveillance – guard services, private investigators, and surveillance providers.

Understanding the Threshold Rules:

The ATO uses two distinct business income thresholds to determine if a TPAR is mandatory:

• For Building and Construction: The reporting obligation applies if 50% or more of your total business income (or total business expenses) comes from providing construction services.

• For Cleaning, Couriers/Freight, IT, and Security: The threshold is much lower. You must lodge if the relevant service makes up 10% or more of your total business income for the year.

This is part of the ATO’s broader push to reduce the cash economy and make sure everyone in the supply chain is meeting their tax obligations.

The deadline: 28 August

The TPAR covering payments made between 1 July 2025 and 30 June 2026 must be lodged by 28 August 2026. This is a fixed annual deadline – it doesn’t shift based on your BAS cycle or tax return schedule.

Important: paper lodgement is no longer accepted. Since August 2025, all TPAR lodgements must be submitted electronically – either through ATO Online Services or directly via your accounting software (Xero, MYOB, and most major platforms have built-in TPAR functionality).

What information do you need to report?

For each contractor you paid during the financial year, you need to provide:

• Their full name or business name
• Their ABN (Australian Business Number)
• Their address
• The total gross amount paid to them across the year, including GST
• The total GST included in those payments

Note: you report the gross amount paid – not just the labour component. If a contractor invoiced you for both labour and materials as part of a service, the full invoice amount is reportable.

Not everything is reportable. You do not need to include:

• Wages or salaries paid to employees (already covered by STP finalisation)
• Invoices unpaid as at 30 June – TPAR is reported on a cash basis, meaning you report payments actually made, not invoices issued
• Payments for materials only, where no services were provided
• Payments made through labour hire firms where they handle PAYG withholding
• Private or domestic projects not connected to your business

Three things to check right now

1. Verify every contractor’s ABN

Missing or incorrect ABNs are the most common TPAR error. If a contractor didn’t provide an ABN when they invoiced you, you may have been required to withhold 47% of the payment under the ATO’s no-ABN withholding rules – which is a separate compliance issue worth reviewing.

Before lodging, confirm you have a valid ABN on file for every contractor. You can check ABNs at abr.business.gov.au.

2. Reconcile your gross payments

Pull your year-to-date figures for each contractor and make sure the total gross amounts (including GST) match what’s sitting in your accounting software. If you’ve been diligent with Xero throughout the year, this should be straightforward. If invoices have been miscategorised or recorded inconsistently, now is the time to find that out — not after you lodge.

3. Separate contractors from employees

Check that anyone coded as a contractor in your system is genuinely operating as one – and that no employees have accidentally been recorded in your contractor payment records. Mixing these up creates problems in both your TPAR and your STP data.

What happens if you miss the deadline?

Failure to lodge a TPAR on time attracts penalties from the ATO. These are calculated in 28-day periods and can reach up to $1,110 per period (up to a maximum of five periods – so up to $5,550 for individuals, higher for companies).

Beyond the financial penalty, non-lodgement is treated as a compliance red flag. The ATO may use it as a trigger for a broader review of your business tax obligations.

If you realise you should have lodged a TPAR in a previous year and didn’t, it’s worth getting that sorted proactively – the ATO generally looks more favourably on voluntary disclosure than on catching the omission themselves.

If your Xero is tidy, this takes minutes

This is the part worth emphasising. For businesses that have kept their bookkeeping clean throughout the year – reconciling invoices promptly, recording contractor ABNs consistently, and categorising payments correctly – the TPAR is not a big job. Xero can generate and lodge the report directly once your data is confirmed.

The businesses that struggle are the ones chasing contractors in late August for ABNs they should have collected in September, or untangling 12 months of miscoded invoices the week before the deadline.

If you’re not sure your records are in good shape, it’s worth a quick review now rather than a stressful scramble at the end of the month.

Need help with your TPAR?

Whether you’re not sure if you need to lodge, want help pulling your contractor data together, or just want someone to check your figures before you submit – we’re here.

Get in touch via email michael@zenfindaccounting.com.au and we’ll get your TPAR sorted cleanly before the deadline.