Understanding TPAR: What It Is and Why It Matters
Each year, businesses in certain industries across Australia must submit a Taxable Payments Annual Report (TPAR) to the Australian Taxation Office (ATO). This report plays a vital role in helping the ATO monitor tax compliance within key sectors, ensuring businesses and contractors are meeting their tax obligations.
What Is TPAR?
The Taxable Payments Annual Report is a mandatory report that details payments made to contractors and subcontractors for services during a financial year. It is primarily aimed at combating the cash economy and promoting transparency in industries where non-reporting of income has historically been a problem.
Who Needs to Lodge a TPAR?
As of the 2024–25 financial year, TPAR reporting is required for businesses that make payments to contractors in the following industries:
Building and construction services
Cleaning services
Courier services
Road freight services
Information technology services
Security, investigation, or surveillance services
Mixed services (if a business provides one or more of the above services)
Even if a business only partially engages in these services, it may still need to lodge a TPAR if those services form a significant part of its operations.
What Needs to Be Reported?
The TPAR must include detailed information about each contractor paid during the year, including:
The contractor’s name
ABN (Australian Business Number)
Address
Total amount paid
Total GST paid
These details are typically gathered from invoices issued by the contractors. It’s important to note that only payments for services (not goods) are reportable, although payments that include both goods and services may still need to be reported.
When Is TPAR Due?
The TPAR is due by 28 August each year, reporting on payments made in the previous financial year (ending 30 June). Failing to lodge the report on time can result in ATO penalties, so it’s critical for businesses to ensure timely compliance.
How to Lodge a TPAR
The TPAR can be lodged through:
Business or tax agent portals via the ATO’s online services
Standard Business Reporting (SBR)–enabled software
Online forms on the ATO website
Accounting software packages often include TPAR reporting tools, allowing businesses to collect and collate the required information throughout the year.
Why TPAR Matters
The TPAR system helps create a level playing field by:
Improving tax compliance among contractors
Reducing tax evasion in high-risk industries
Encouraging accurate record-keeping by businesses
The data provided through TPAR is used by the ATO to pre-fill tax returns, cross-check income reporting, and target audits where underreporting is suspected.
Final Thoughts
If your business pays contractors for services in a TPAR-reportable industry, it’s essential to stay informed and compliant. Ensure you are keeping accurate records throughout the financial year, use accounting tools that support TPAR reporting, and consult with a tax advisor or accountant if you’re unsure of your obligations.
Timely and accurate TPAR submissions not only keep you on the right side of the law but also help support a fair and transparent tax system across Australia. If you need assistance with this, please contact S & H Tax Accountants. We are a wonderful team that consists of well-qualified, vastly experienced and extremely professional team members. Book an appointment today, call us on 03 8759 5532 or you can email us on info@sahtax.com.au