TPAR: Who Must Lodge the Taxable Payments Annual Report (and What to Report)

The TPAR (taxable payments annual report) is a yearly report to the ATO listing every payment your business made to contractors for six types of services: building and construction, cleaning, courier, road freight, IT, and security, investigation or surveillance. It's due by 28 August for the financial year that ended 30 June. If you run a building business and pay subcontractors, you lodge one. If you're in one of the other five industries, you lodge one when those services make up 10% or more of your business income and you paid contractors to deliver them.

What is the taxable payments annual report?

The TPAR is part of the ATO's Taxable payments reporting system (TPRS). Businesses in industries where contractors have historically under-reported income tell the ATO who they paid and how much, and the ATO matches those figures against each contractor's tax return. It isn't a tax you pay. It's a data report, and lodging it costs nothing.

It sits alongside, not instead of, your other reporting. Employees go through Single Touch Payroll, GST goes in your BAS, and contractor payments for the six TPRS services go in the TPAR.

Who needs to lodge a TPAR?

There are two tests, depending on your industry.

Building and construction: the 50% test

You must lodge if you're primarily in building and construction, you have an ABN, and you paid contractors for building and construction services. According to the ATO, you're primarily in building and construction if any of these apply:

• 50% or more of your business income this financial year comes from building and construction services;
• 50% or more of your business activity this year relates to building and construction services; or
• 50% or more of your business income last financial year came from building and construction services.

The third point catches businesses that drop below 50% for a year: if last year was over 50%, you still lodge this year. Building and construction is broad. It covers plumbing, electrical, tiling, painting, cabinet making and installation, landscaping, demolition, and most trades working on a building or structure.

Cleaning, courier, road freight, IT and security: the 10% test

For the other five services, you must lodge if both of these apply:

• payments you received for the service make up 10% or more of your business income for the year; and
• you made payments to contractors to provide that service.

The ATO's formula is: total payments received for the service ÷ current or projected business income × 100. Courier and road freight income is combined before you do the test. If you started part way through the year, use projected income for a full year.

Worked example: does this business need to lodge?

Coastline Facility Services earned $820,000 in 2025–26. Most of it was property maintenance, but $131,000 came from office cleaning contracts, and it paid two cleaning subcontractors $64,000 between them.

If cleaning income had been $75,000 (9.1%), Coastline wouldn't need to lodge, even though it paid cleaning contractors. And if it paid nothing to contractors, there'd be nothing to report, whatever the percentage.

What payments go in the TPAR?

Report payments you actually made between 1 July and 30 June to contractors and subcontractors for the TPRS services, in whole dollars. If a contractor's invoice includes both labour and materials, report the total amount paid. For each contractor, the ATO wants:

• their ABN (if their ABN changed during the year, each one);
• their name (business name or individual's name);
• their address;
• the gross amount paid for the year, including GST;
• the GST included in that amount; and
• any tax withheld because the contractor didn't quote an ABN.

Every one of those details should already be on the contractor's invoices. That's why a properly made contractor invoice matters on both sides: missing ABNs and addresses are the most common reason a TPAR takes hours instead of minutes.

What you don't report

The ATO's exclusions list includes:

• Materials only, and labour that's incidental to a materials sale, such as a supplier fitting one tap to show you how.
• Invoices unpaid at 30 June. Report payments in the year you made them, not the year you were invoiced.
• Employees and other PAYG withholding payments, which go through Single Touch Payroll.
• Labour-hire or on-hire workers.
• Payments within a consolidated group for income tax.
• Private and domestic work, such as a builder paying a cleaner for their own home from a personal account.
• Payments to foreign residents that are subject to foreign resident withholding, and work done overseas.
• Contractors who didn't quote an ABN. You withhold tax from them instead and report it either in the TPAR or on the no-ABN withholding payment summary (NAT 3448), not both. Our guide on whether you need an ABN to invoice explains the 47% withholding rule.

How to lodge your TPAR

1. Pull a contractor payments report for 1 July to 30 June from your accounting software, filtered to payments actually made.
2. Check each contractor's ABN and details against their invoices and ABN Lookup.
3. Remove excluded payments: materials, employees, private work.
4. Lodge using one of the ATO's options: SBR-enabled business software (Xero, MYOB and QuickBooks can all prepare it); Online services for business (Lodgments → Taxable payments annual report); Online services for individuals and sole traders (Tax → Lodgments); or your registered tax or BAS agent.
5. Keep the receipt ID from the lodgment.

If you lodged last year but don't need to this year, lodge a non-lodgment advice. Otherwise the ATO may treat the report as overdue. Failure-to-lodge penalties are calculated in penalty units for each 28 days the report is late.

A spreadsheet works fine for a handful of contractors. The ATO even publishes a taxable payments reporting worksheet. Once you pay contractors every week, though, keeping it all in software saves the August scramble.

If you're the contractor: what the TPAR means for you

Most TPAR guides are written for the business that lodges. But if you're a sole trader cleaner, sparky, courier or subbie, the TPAR affects you too: whoever pays you reports your income to the ATO.

• The ATO already knows roughly what you earned. TPAR data is matched against your tax return. If the income you declare is well under what your clients reported, expect a letter.
• The figure is the gross amount paid, including GST. If you're registered for GST, your income in the tax return is GST-exclusive, so the two numbers won't match exactly. That's normal.
• Your invoices are the source. If your invoice has the wrong ABN, an old address or a trading name the payer can't match, your payments may be reported against the wrong details. Use the same legal name and ABN every time. Our ABN invoice template puts them where accounts teams look.
• Timing follows payment, not invoice. A June invoice paid in July lands in the next financial year's TPAR.
• You can ask for a copy. Payers don't have to tell you what they reported, but the ATO provides a payee information statement they can give you showing the totals.
• No ABN means 47% withheld. If you don't quote an ABN, the payer must withhold tax at the top rate plus the Medicare levy.

Keep your own record of what each client paid you, so you can reconcile against what they report. If you track invoices in an app, InvoiceSonic and similar tools let you export paid invoices by client and financial year in a couple of clicks.

Common TPAR mistakes

• Reporting invoices instead of payments. Only amounts actually paid by 30 June count.
• Leaving out GST. Report the gross amount including GST, with the GST shown separately.
• Including materials suppliers, which pads the report with payments that shouldn't be there.
• Forgetting the non-lodgment advice in a year you don't need to lodge.
• Missing contractor ABNs. Collect them before the first payment, not in August.
• Assuming the 10% test applies to builders. It doesn't. Building and construction uses the 50% primary-business test.

On large building jobs, some head contractors pay subbies through recipient created tax invoices instead of the subbie's own invoice. Those payments still go in the TPAR the same way.

This article is general information, not financial, legal or tax advice. For guidance specific to your business, see business.gov.au and the ATO, or speak to your accountant.

Frequently asked questions