If your business pays contractors to clean, deliver, build, secure or fix IT systems, there is a good chance you have to lodge a taxable payments annual report (TPAR) every August. The ATO uses these reports to match what businesses pay contractors with what those contractors declare, and it follows up on businesses that should lodge but do not. This guide explains who must lodge, what goes in the report and how to make it painless.
Which businesses must lodge
The TPAR applies to businesses that provide any of these services and pay contractors to provide them on their behalf:
- Building and construction
- Cleaning
- Courier and road freight
- Information technology
- Security, investigation or surveillance
For cleaning, courier and road freight, IT and security, you generally need to lodge if payments you received for providing that service make up 10% or more of your business income for the year and you paid contractors to provide it. Courier and road freight are combined for the test. Businesses in their first year use projected income. Building and construction businesses have their own tests, and most that pay subcontractors need to lodge. Government entities also report payments to contractors.
When it is due
The TPAR covers the financial year to 30 June and is due by 28 August. There is no separate tax agent extension for it. If you find you do not need to lodge for a year, you can tell the ATO by lodging a TPAR not required notice, which stops follow-up letters.
What you report for each contractor
- ABN, if known
- Name and address
- Gross amount paid for the year, including GST, in whole dollars
- Total GST included in those payments
You report payments for the relevant services only. Payments for materials alone, such as buying timber or cleaning products from a supplier, are not reported. Where an invoice combines labour and materials, the whole payment is generally reported.
How to make it easy
- Tag contractors in your accounting software. Xero, MYOB and QuickBooks can flag a contact as a TPAR contractor and produce the report automatically
- Collect ABN and address details at onboarding, not in August
- Check ABNs on the ABN Lookup. If a contractor does not quote an ABN, you must withhold tax at the top rate from payments, which is reported separately
- Reconcile to your BAS. Contractor payments in the TPAR should line up with what you have claimed as expenses and GST credits
What the ATO does with it
The ATO compares TPAR data with contractors’ own tax returns and BAS. Contractors who under-declare income are picked up, and businesses that report contractor payments that look like wages can be reviewed for super guarantee, PAYG withholding and sham contracting. Failure to lodge penalties can also apply to businesses that do not lodge on time.
Contractors or employees?
A TPAR is also a useful annual check on whether your contractors are really contractors. A worker paid by the hour, who must do the work personally and is directed how to do it, may be an employee or at least owed super guarantee. With payday super from 1 July 2026, getting this wrong is more expensive than ever. See our payday super guide.
Frequently asked questions
Do I report payments to companies?
Yes. TPAR covers payments to contractors operating as sole traders, partnerships, companies and trusts.
Do I report wages to employees?
No. Employee wages are reported through Single Touch Payroll.
I lodged a TPAR last year but no longer use contractors. What do I do?
Lodge a TPAR not required notice so the ATO knows you do not need to lodge for that year.
TPAR and BAS support in Melbourne’s west
Kennedy Tax & Business Services prepares TPARs, BAS and bookkeeping for cleaning, courier, construction, security and IT businesses across Footscray, Williams Landing and Melbourne’s west. See our BAS lodgement and bookkeeping services, or contact us.
This article is general information only and does not take into account your circumstances. Based on ATO guidance current at October 2026. Speak to a registered tax agent before acting.
