The Taxable Payments Annual Report (TPAR) is an ATO reporting obligation that requires businesses in certain industries to report total payments made to contractors during the financial year. The ATO uses TPAR data to cross-reference contractor income — if a contractor doesn't declare income that appears on a client's TPAR, the ATO knows.
For bookkeepers managing clients in the relevant industries, TPAR compliance starts on 1 July, not in August when the report is due.
Which Industries Must Lodge TPAR?
TPAR currently applies to businesses in these industries:
- Building and construction (including tradies, builders, concreters, electricians, plumbers)
- Cleaning services
- Courier and delivery services
- Road freight transport
- IT services
- Security and investigation services
- Government entities (federal, state, and local government bodies must also lodge)
The test is whether the business provides services in one of these industries AND makes payments to contractors for those services. A business that hires a building contractor to renovate its own office does not need to lodge TPAR — the obligation applies when the business itself provides the relevant services.
Mixed-industry businesses (for example, a retailer that also does some freight work) may have a TPAR obligation for the freight portion of their activity.
What Payments Must Be Reported?
TPAR covers payments made to contractors — individuals, companies, partnerships, or trusts — for providing the relevant services. The report must include:
- ABN of the contractor (or note if no ABN was provided)
- Name and address of the contractor
- Total gross amount paid during the financial year (including GST)
- Total GST amount included in those payments
The report covers ALL payments to contractors, including labour-only subcontracting and mixed labour-and-materials contracts. If the payment was for services that fall within the industry, it must be reported.
Payments to employees (where PAYG withholding applies) are NOT included in TPAR — TPAR is specifically for contractor payments.
The Building and Construction Industry: Special Considerations
The building and construction industry has the broadest TPAR application. Virtually any trade work paid to a subcontractor by a builder, developer, or trade business falls within scope:
- Carpentry, concreting, bricklaying, tiling
- Plumbing, electrical, air conditioning
- Painting, glazing, roofing
- Landscaping when integral to construction projects
A building business that uses owner-operators (truck drivers, labourers, machine operators) as contractors must include those payments in TPAR, regardless of whether those individuals issued formal tax invoices.
Practical Record-Keeping for TPAR
Because TPAR requires ABNs and total annual payments per contractor, the data must be maintained throughout the year — reconstructing it in August from fragmented records is time-consuming and error-prone.
The simplest approach: create a TPAR register (a spreadsheet or dedicated report in your accounting software) that is updated whenever a contractor payment is made. Record:
- Contractor ABN
- Legal name (as registered with the ATO — not the trading name)
- Physical address
- Date and amount of each payment (including GST)
- Running total for the year
Most modern accounting software can generate a TPAR-ready report if contractor payees are set up correctly with their ABN and categorised as contractors rather than suppliers. Review your software's TPAR report before July to confirm it's capturing the right payees.
Validating Contractor ABNs
Before making any payment to a contractor, verify their ABN is active using the ATO's ABN Lookup service (abr.business.gov.au). Record the verification date. This both:
- Confirms the ABN is valid (protecting you from fraudulent ABN claims)
- Ensures you have the correct legal name for TPAR reporting
If a contractor cannot or will not provide an ABN, you are required to withhold 47% from their payment unless an exemption applies. Withholding payments do not need to be reported in TPAR (they're covered under PAYG withholding obligations) but should still be tracked.
The Lodgement Deadline
TPAR is due on 28 August each year, covering payments made in the financial year ending 30 June. This gives bookkeepers less than two months between year-end and lodgement — another reason the data needs to be maintained throughout the year rather than gathered in August.
Penalties for late lodgement follow the standard failure-to-lodge penalty structure: one penalty unit per 28-day period of delay, up to a maximum. For businesses with large contractor spend, the TPAR is straightforward to prepare if the records are clean; for those without structured record-keeping, the catch-up work in August is significant.
How the ATO Uses TPAR Data
The ATO uses TPAR data in its data-matching program. When a contractor's income declared in their tax return is less than the total reported across their clients' TPARs, the ATO flags the discrepancy and may review the contractor's return.
This means TPAR accuracy matters beyond the business that lodges it — it affects the contractor's tax position. If your client has paid a contractor $85,000 and reports $85,000 in TPAR, that contractor needs to declare at least $85,000 from your client in their return. The cross-referencing is automated and systematic.
For bookkeepers, this is another reason to get the figures right — an error that overstates a contractor's income in TPAR may cause unnecessary ATO attention for that contractor.
Checklist for TPAR Preparation
- Confirm whether the client operates in a TPAR-eligible industry
- Review all contractor payments for the year against the TPAR register
- Verify ABNs for all contractors using ABN Lookup
- Confirm legal names match ABN registration (not trading names)
- Review accounting software TPAR report for completeness
- Lodge before 28 August via the ATO Business Portal or through your tax agent software
TPAR compliance is straightforward when the data is maintained from day one of the financial year. The challenge — and the professional value the bookkeeper adds — is building the record-keeping habit before August, not scrambling to reconstruct it after year-end.