If your business operates in building and construction, IT services, cleaning, courier and freight, or security, you need to be aware of an important ATO tax reporting requirement. The taxable payments annual report (TPAR) deadline is fast approaching, with lodgements due by 28 August.

Businesses in these industries that pay contractors — whether sole traders, companies, partnerships or trusts — may be required to lodge a TPAR with the ATO.

For IT services, TPAR only applies where your business provides services to clients and pays contractors to deliver those services on your behalf.

Who needs to lodge a TPAR?

You must lodge a taxable payments annual report if your business is primarily in one of the affected industries and you have paid contractors during the financial year. Even if you have only engaged a single contractor, this can still create a reporting obligation.

A common question is whether a business that has multiple activities needs to lodge. The ATO requires a TPAR if the majority of your business activity relates to a relevant service (such as cleaning or construction) and you have paid contractors to perform those services.

What to include in your TPAR

Your TPAR must include contractor details such as:

• ABN
• Name and address
• Total payments made during the year
• GST component (if applicable)

Not all payments need to be reported. You don’t need to include:

• Invoices unpaid as at 30 June
• Payments for materials only
• Payments where labour was incidental to the overall supply (for example, a delivery fee)
• Payments to employees or workers engaged through labour hire arrangements

Why TPAR compliance matters

The ATO uses TPAR data to cross-check contractor income against what they declare. If there are discrepancies, this can lead to ATO reviews or audits of both the contractor and your business.

Failure to lodge a TPAR on time can also result in penalties, particularly if the ATO considers the delay deliberate.

How to lodge your TPAR

You can lodge your TPAR through:

• The ATO Business Portal
• Standard Business Reporting (SBR) enabled software
• Your registered tax or BAS agent

ATO guidance notes that businesses should use digital lodgement where possible, and accounting software often has built-in functionality to help prepare TPAR reports more efficiently.

Recommended actions before the 28 August deadline

• Review your contractor payments now
• Ensure your accounting software is set up for TPAR reporting
• Confirm which payments must be included and which can be excluded
• Lodge online through the ATO portal or with the help of your tax agent

Stay compliant with LDB

The taxable payments annual report is part of Australia’s tax integrity system. It is not optional — if your business falls into one of the relevant industries, it is a statutory requirement.

At LDB, our tax specialists can review your contractor payments, prepare your TPAR, and lodge it on time, so you stay compliant and avoid unnecessary ATO scrutiny.

Call us today on (03) 9875 2900 or get in touch online to speak with our tax team about your TPAR obligations.