ATO deadline, 28 August
TPAR Is Due 28 August.Work out whether you have to lodge one, before the ATO works it out for you.
If you run a trade business and you paid a subcontractor this year, there is a fair chance you owe the ATO a taxable payments annual report by 28 August. Most owners have never heard of it until the year they get a letter. This page tells you whether you have to lodge, what goes in it, how to lodge it, what to do if you do not have to, and how to think about what your business can actually claim without guessing at a number that changed.
Why this one catches people
Sound Familiar?
Nobody ever told you this one existed
You know about BAS. You know about the tax return. Then a letter turns up about a taxable payments annual report, or your bookkeeper mentions it in the third week of August, and it turns out you have had the obligation for as long as you have been paying subbies. It is not a small business tax. It is a report about the people you paid, and the ATO already has their side of it.
The information is in six places and none of them is a list
To lodge it you need every subcontractor you paid, their ABN, their address and what you paid them including GST. That is sitting in your accounting software, in a folder of PDFs, in your bank statements, in a text message about a bloke who did two days of demolition, and in your head. Pulling it together in the last week of August is a full day you did not plan for.
So you guess, or you go quiet
Either you lodge something you are not confident in and hope the numbers line up with what your subbies declared, or you decide it probably does not apply to you and say nothing. The second one is the more common and the more expensive, because a report that never arrives is far more visible to the ATO than a report with a mistake in it.
The report itself takes under an hour once the records exist. The reason it costs owners a weekend every August is that the records do not exist yet, and the reason it costs some of them a penalty is that nobody told them the date.
The answer
Do You Have To Lodge One? Work It Out In Seven Steps.
There are two tests and most explainers blur them into one. Which one applies to you depends on what your business is paid for, and the second one has a threshold five times lower than the first.
Start with what your business is actually paid for
The whole question turns on the mix of your income, not on how many subbies you used or how much you paid them. Take your income for the financial year that just ended on 30 June and split it by what the customer was paying you to do. If you have been trading less than a full year, the ATO tells you to use your projected income for the next full year instead.
If you are primarily building and construction, the test is 50 per cent
You are treated as primarily in building and construction if 50 per cent or more of your income came from building and construction services this year, or 50 per cent or more of your business activity related to them, or 50 per cent or more of your income came from them in the year before. Any one of those three is enough. The prior-year limb catches out businesses that have just changed direction: you can be under half this year and still have to lodge because you were over half last year.
Know how broad building and construction actually is
It is not just building. The ATO definition covers alteration, assembly, construction, demolition, design, dismantling, erection, excavation, finishing, improvement, installation, maintenance, modification, removal, repair and site preparation, where the work is done on or in relation to any building, structure, works, surface or sub-surface. Installing, maintaining and repairing are in it, which is why electrical, plumbing, air conditioning, roofing, tiling and landscaping work all sit inside the definition rather than outside it.
If you are one of the other four reportable services, the test is 10 per cent
Cleaning, courier and road freight, information technology, and security, investigation or surveillance are also reportable, and for those the threshold is far lower: if 10 per cent or more of your business income comes from the service and you paid contractors to deliver it, you lodge. Courier and road freight are combined for the purposes of that test. This is the branch most pages leave out, and it is the one that catches a trade business with a delivery or a cleaning arm.
Check that you actually paid contractors for that service
Passing the income test on its own does not create a report. You lodge if you meet the test AND you made payments to contractors or subcontractors for that service during the year. Contractors here can be sole traders, companies, partnerships or trusts. Payments to your own employees are not reported and never were, which is the single most common thing owners get wrong in their first report.
Pull four things for every contractor you paid
Their name, their address, their ABN, and the total you paid them for the year including GST. Including the GST, not net of it. If your accounting software is set up for it, it will produce the file for you; if it is not, you are reading it off invoices and bank statements, which is why the owners who do this calmly are the ones who set the records up in July rather than reconstructing them in August.
Lodge it online, and if you do not have to lodge, say so
Paper is gone: lodge through business software that can produce the file, through Online services for business, through Online services for individuals and sole traders, or through your registered tax or BAS agent. If you have decided you do not need to lodge this year, do not just go quiet. The ATO has a non-lodgment advice for exactly that, and lodging one is what turns a missing report into a closed matter.
The short version
If half or more of your income or your business activity is building and construction work, and you paid a subcontractor anything at all during the year, you have a taxable payments annual report to lodge by 28 August. If you run a cleaning, courier, road freight, IT or security arm, the same is true at 10 per cent of income instead of 50. You report each contractor by name, address and ABN with the total you paid them including GST. Payments to employees do not go in it. If you have decided you do not have to lodge, lodge a non-lodgment advice rather than saying nothing.
Worth knowing
What The ATO Actually Requires.
A taxable payments annual report must be lodged by 28 August each year, covering the financial year that ended on the previous 30 June, and paper lodgment is no longer accepted, so it has to be lodged online or through a registered agent.
A business is treated as primarily in building and construction, and so must lodge a TPAR for payments to contractors, if 50 per cent or more of its income OR 50 per cent or more of its business activity relates to building and construction services in the current year, or if 50 per cent or more of its income did in the year before.
The reportable services under the taxable payments reporting system are building and construction, cleaning, courier and road freight, information technology, and security, investigation or surveillance, and for every one of those except building and construction the test is whether 10 per cent or more of business income comes from the service.
For every contractor in the report a business must hold their name, their address, their Australian business number and the amount paid to them including GST, and payments made to employees are not reported in a TPAR at all.
The other half of August
What You Can Actually Claim, Without Guessing.
The second reason a trade business owner ends up on a tax page is deductions, and it is where the internet is least useful, because almost every list is either a year out of date or written by somebody who has never owned a ute.
The test is one sentence, and it is not a list
A business deducts what it incurred in earning its income, in the year it incurred it, and it has to be able to show that it did. Every list of tradie deductions you will ever read is somebody applying that sentence to a typical business. Yours is not typical, which is why the sentence is more useful than the list.
Apportionment is where the money actually goes
Anything used privately as well as for the business is only deductible to the extent of the business use. The ute that does the school run, the phone, the internet, the tools that go home. Owners lose far more to sloppy apportionment than to missing an exotic claim, because a percentage you invented in July cannot be defended and a percentage you logged as you went is simply a fact.
A claim you cannot evidence is not a claim
Keep the receipt at the time, not at the end. Photograph it in the ute before it goes through the wash. This is the least interesting advice on this page and it is the one that decides how much of your deduction survives a question.
On assets, get the current threshold rather than a number off a page
Whether a purchase is written off immediately or depreciated over years depends on a dollar threshold and a date that are set year by year, and there is a separate cap for cars that does not apply to every ute. We deliberately do not print either figure here, because they are among the most frequently changed numbers in small business tax and a stale one costs a reader real money. Take the purchase price and the date to the ATO instant asset write-off page for that year, then to your accountant, before you sign.
The deduction is not the win
A deduction returns your tax rate on the money, not the money. Buying a forty thousand dollar asset you did not need in order to save tax leaves you with less cash and an asset you did not need. The businesses that get this right buy the thing when the work justifies it and time the purchase for the tax, in that order and never the other way round.
After the lodgment
Compliance Is Not The Problem. It Is The Symptom.
Nobody gets caught out by a TPAR because they cannot read an ATO page. They get caught out because the records were never set up, the subbie arrangements were never written down, and there was never a spare hour in August. That is a systems problem and it is the part we fix.
The question underneath it
Are They Even Subcontractors?
A TPAR reports what you paid your subcontractors. It assumes they are subcontractors. The ATO position is that if you pay someone mainly for their labour, they are an employee for superannuation purposes even if they have an ABN and even if you both call it subcontracting, and the Fair Work definition of employment changed in August 2024. Working through the report is the moment most owners realise they have never actually checked the arrangement.
Check the arrangementFree tools, no sign-up
The Two Numbers Behind The Tax Bill.
Tax is worked out on what the business made. These two decide what it makes.
Charge-out rate calculator
What an hour has to be sold for once overheads, unbillable time and the profit you actually want are in it. Runs in your browser.
Apprentice cost calculator
The all-in cost of an apprentice, including the supervision time that pulls a qualified tradesperson off their own work. Runs in your browser.
Questions
TPAR And Tradie Tax, Answered.
When is the TPAR due?
Who needs to lodge a TPAR?
Do I need to lodge a TPAR if I only paid one or two subbies?
Do I report payments to my employees in the TPAR?
Do I report what I paid a subcontractor including GST or excluding it?
What happens if I do not lodge a TPAR on time?
What if I do not need to lodge a TPAR this year?
What can tradies claim on tax?
Can I write off a ute under the instant asset write-off?
Is this page tax advice?
Lodge It, Then Fix The Reason August Hurts.
The Crew, daily Q&A, starter courses and your complimentary coaching session. Free with an active ABN. No card, no trial clock.
Turning over $20k a month or more? Thirty minutes, one on one with a trade business coach, on what is capping the business and what to fix first.