The Taxable Payments Annual Report (TPAR) is an annual ATO report that requires businesses in specific industries to report the total payments they made to contractors during the financial year. The ATO uses this data to cross-reference contractor income declarations — if a contractor received $45,000 from 12 different clients but only declared $28,000 in income, the TPAR data makes that visible.
For bookkeepers, TPAR creates two obligations: ensuring eligible clients are registered for TPAR lodgement, and collecting the right data from contractor invoices throughout the year rather than scrambling to reconstruct it in August.
Which industries must lodge a TPAR?
The TPAR obligation has expanded significantly since its introduction. As of 2026, businesses that make contractor payments in the following industries must lodge:
Building and construction: Any business that provides building, construction, installation, alteration, maintenance, or repair of buildings or structures. This includes residential and commercial builders, electricians, plumbers, painters, concreters, roofers, and landscapers.
Cleaning services: Businesses providing cleaning services to residential or commercial premises.
Courier and delivery services: Businesses providing road freight, courier, or delivery services using vehicles.
Road freight: Haulage operators paying contractor drivers.
Information technology: IT contractors paid for development, maintenance, or support services.
Security, investigation, or surveillance services: Security guard firms, private investigators, and CCTV operators paying contractors.
Government entities: All government entities making relevant payments.
Mixed businesses: If a business earns 10% or more of its income from TPAR-applicable services, it must lodge.
The most common practical situation for bookkeepers: a construction or trade business that uses subcontractors. Almost every Australian builder, plumber, or electrician has a TPAR obligation.
What data must be reported
For each contractor paid during the financial year, the TPAR must include:
- Contractor's ABN (or note that it was not quoted)
- Contractor's name (individual or business name)
- Contractor's address
- Total amount paid (gross, before any deductions)
- Total GST included in those payments
- Total tax withheld (if no ABN was provided — withholding at 47%)
The report covers payments made during the Australian financial year (1 July to 30 June). The TPAR is due by 28 August following the end of the financial year. So for the 2024–25 financial year (1 July 2024 – 30 June 2025), the TPAR was due 28 August 2025.
The ABN-not-quoted withholding rule
If a contractor does not provide an ABN, the paying business is required to withhold 47% of the gross payment and remit it to the ATO as PAYG withholding. This is separate from the TPAR obligation — it's a real-time withholding obligation that arises at the time of payment.
For bookkeepers, this means:
- Every contractor invoice should be checked for an ABN before processing
- If no ABN is present, calculate 47% of the gross invoice amount
- Pay the contractor the net amount (53%)
- Remit the withheld 47% to the ATO through the client's activity statement (label W1/W2)
- Report the withheld amounts in the TPAR
A common error is paying a contractor invoice that has no ABN for the full amount, then trying to recover the withholding issue at year-end. This creates an ATO liability for the unpaid withholding plus penalty interest.
How to collect TPAR data throughout the year
The bookkeeper who tries to compile TPAR data in late August by going back through 12 months of invoices will have a difficult time. The better approach:
Set up a TPAR contractor register at the start of each engagement. For any client in a TPAR-affected industry, maintain a spreadsheet or accounting software field tracking:
- Contractor ABN
- Contractor business name
- Contractor address
- Running total of payments made (gross)
- Running total of GST included
Update the register at each reconciliation. When coding a contractor payment through Reconlink, confirm the contractor ABN is on file. Add any new contractors to the register at the time of the first payment — it's far easier than reconstructing details from 10-month-old invoices.
Code contractor payments separately from employee wages. In the Chart of Accounts, use specific accounts for contractor subcontracting payments (e.g., 6-1500 Subcontractor Labour) separate from employee wages. This makes pulling the TPAR data a simple account extract rather than a transaction-by-transaction search.
What happens if a client doesn't lodge
The ATO issues penalties for TPAR non-lodgement through its failure-to-lodge penalty regime:
| Period overdue | Penalty |
|---|---|
| Up to 28 days | 1 penalty unit = $330 |
| 29–56 days | 2 penalty units = $660 |
| 57–84 days | 3 penalty units = $990 |
| More than 84 days | 5 penalty units = $1,650 |
For significant withholders (businesses that withhold large amounts), penalties are multiplied. Deliberate non-lodgement can result in higher penalties.
The ATO also pursues the underlying tax collection purpose: contractors identified through TPAR cross-matching whose income declarations are inconsistent are subject to ATO review.
Lodging the TPAR
TPAR is lodged through the ATO's Online Services for Agents portal, via accounting software with TPAR integration, or via the Business Portal. Registered BAS agents can lodge on behalf of clients.
The lodgement format requires each contractor's details in a structured format. Most accounting platforms (Xero, MYOB) have TPAR reports that export in the required format. Reconlink's transaction records support TPAR preparation through coded contractor payment exports — export all transactions coded to contractor accounts for the relevant period, match against the contractor register, and complete the report.
Frequently asked questions
Does TPAR apply to a sole trader who hires a one-off subcontractor?
Yes, if the sole trader operates in a TPAR-affected industry and pays a contractor for services in that industry. Even a single payment of $1,000 to a subcontractor creates a TPAR obligation.
What if the contractor is a company, not an individual?
The TPAR obligation is the same — report payments to contractor companies. The ABN required is the company ABN, not the director's individual TFN.
Does TPAR include labour hire?
No. Labour hire payments are reported through STP (the labour hire worker is treated as an employee for STP purposes). TPAR covers genuine contractor-to-business relationships.
What if the total contractor payments for the year are very small?
The ATO provides a $nil lodgement option if a business has no reportable contractor payments for the year. If the client operates in a TPAR industry but used no contractors, lodge a nil TPAR to confirm compliance.
This article was last reviewed on 27 May 2026. TPAR industry scope and lodgement requirements change. Always confirm current obligations at ato.gov.au/tpar. This is general guidance, not specific tax or legal advice.