Advice Business Tax

A Taxable Payments Annual Report (TPAR) is an industry-specific form that details the total amount a business has paid to contractors throughout the year.

Businesses and government entities who make payments to specific categories of contractors may need to report these payments by lodging a TPAR.

‘Contractors’ for reporting can include subcontractors, consultants and independent contractors, and they can operate as sole traders (individuals), companies, partnerships or trusts.

A TPAR is lodged once a year and must be lodged by the 28th of August each year.

What Type Of Contractors Require A TPAR?

If you have paid a contractor or subcontractor for the following services, you may be required to lodge a TPAR:

  • Building and construction services
  • Cleaning services
  • Courier services
  • Road freight services
  • IT services
  • Security, investigation or surveillance services
  • Some government entities also need to report the grants they have paid.

If you are a business in one of these categories, then you also need to lodge a TPAR if:

  • 10% or more of your business income for the financial year is from a relevant service (the list above), and
  • You made payments to contractors for an applicable service during the year

It’s best to check the ATO for the specific rules related to your industry and what types of payments require lodgement. Click here to see the ATO’s list of payments businesses need to report.

Why Do We Have a TPAR?

The TPAR system is designed so the ATO can identify which contractors are not meeting their obligations.

They do this through the details in payments made to contractors for providing services for the year. Some government entities also need to report the grants they have paid.

It is not quite as complicated as it sounds. You should be able to find details you need to report about each contractor you have hired in your accounting software.

The contractor details you need to report include those that should also be on your invoices:

  • Australian Business Number (ABN)
  • Name and address
  • The amount you paid to them for the financial year (including any GST)

If set-up right, commonly used business accounting software such as Xero and Myob can easily find this information to streamline the preparation and lodgement of your TPAR.

We can assist you in understanding if you are obligated to submit a TPAR and prepare and lodge your report. We can also help you ensure that your accounting system is streamlined to minimise the administrative burden of meeting your ATO obligations.

Click here to book in a chat with Amanda to see how we can help.