If you run a business that pays contractors for building and construction, cleaning, courier and road freight, IT, or security, investigation or surveillance services, you may need to lodge a Taxable Payments Annual Report (TPAR) by 28 August each year for the prior financial year. You report contractor names, addresses, ABNs and GST-inclusive amounts paid — electronically only. If you do not need to lodge for a year, submit a non-lodgment advice (NLA).
This guide is for Australian small businesses and bookkeepers who need a plain-English answer on tpar australia contractors: who is in scope, how the 10% and building “primarily” tests work, what details to report, how to lodge, and what to keep tidy in Xero all year so August is not a scramble. For employee vs contractor classification (PAYG and super), see our separate employee vs contractor bookkeeping guide. For payroll fundamentals, see our payroll, PAYG and super guide.
What is a TPAR (and TPRS)?
TPAR stands for Taxable Payments Annual Report. It sits under the ATO’s Taxable Payments Reporting System (TPRS). In short: certain businesses must tell the ATO each year how much they paid to contractors for specified services.
It is a reporting obligation, not a tax on the payment itself. The ATO uses TPAR data to help match contractor income. Your job as the payer is to get the contractor list and totals right, on time, in the right format.
The ATO’s hub for the rules is the Taxable Payments Annual Report page. Use that (and your registered BAS agent or tax practitioner) when you need the official wording — this article translates the practical “do I lodge / what do I report” questions for SMBs.
Which industries and services are covered?
TPAR covers payments to contractors for services in these reportable service industries:
- Building and construction
- Cleaning
- Courier and road freight
- Information technology (IT)
- Security, investigation or surveillance
“Contractors” here can be sole traders, companies, partnerships or trusts — anyone you pay as a subcontractor, consultant or independent for those services. It is about the nature of the payment and the service, not whether they call themselves a “tradie” or “freelancer.”
If your only contractor spend is outside those services (for example, a one-off graphic designer with no link to the industries above), TPAR for those payments usually does not apply. When your business sits across multiple activities, read the industry tests carefully — especially the 10% test and the building “primarily” test below.
The 10% test vs building and construction’s “primarily” (50%) test
This is where most SMBs get stuck. The rules are not the same for every industry.
Cleaning, courier and road freight, IT, and security (and similar)
For these services, you generally need to lodge a TPAR if you:
- Provide that relevant service (or pay contractors to provide it on your behalf),
- Have an ABN, and
- Where the service is only part of your business, 10% or more of your gross business income comes from that relevant service.
Important detail: for courier and road freight, income from both is combined when you apply the 10% test. Do not treat them as separate silos if you earn from both.
Building and construction (different test)
Building and construction uses a “primarily” test, not the 10% rule. In plain English, you generally lodge if you:
- Run a business that is primarily in building and construction — generally 50% or more of your income or activity in the current year, or 50% or more of income in the immediately prior year,
- Make payments to contractors for building and construction services, and
- Have an ABN.
So a general builder who is clearly “mostly construction” and pays subcontractors will usually be in scope. A business that only occasionally engages a builder for a fit-out, and is not primarily a building business, is a different analysis — check the ATO’s work out if you need to lodge a TPAR guidance before you assume either way.
If your mix of income is close to a threshold, do not guess from a blog. Pull the year’s figures, apply the right test, and if needed speak to your tax agent or accountant about whether you sit inside or outside the obligation.
What contractor details do you report?
When you lodge, you report payments to each contractor for the relevant services. Practically, bookkeepers and BAS agents expect you to be able to supply (or extract from software):
- Name of the contractor
- Address
- ABN
- Total amount paid, including GST
That last point matters: totals are GST-inclusive. If your Xero reports show GST-exclusive purchase totals only, you will understate the TPAR figure unless you adjust.
You need this for contractors you paid for the reportable services during the financial year. Keep invoices, payment records and ABN checks — not just a bank narrative that says “Joe – labour.” Clean supplier cards and coded bills make the August extract a filter, not a forensic project.
How to lodge (electronic only) and when NLA applies
Due date: lodge by 28 August each year for the prior financial year. Example: the 2025–26 year is due by 28 August 2026.
Paper lodgments are no longer accepted. You lodge electronically via one of:
- Online services for business
- Online services for individuals / sole traders (where that channel applies to you)
- SBR-enabled software
- A registered tax practitioner (including a registered BAS agent lodging on your behalf where appropriate)
If you do not need to lodge a TPAR for a given year, the ATO still expects you to submit a non-lodgment advice (NLA) rather than silence. That keeps your reporting position clear.
Missed 28 August? Do not invent a penalty figure from a blog. Check the ATO, lodge as soon as you can, and talk to your BAS agent or tax practitioner about next steps. Our Australian tax news — August 2026 roundup also flags seasonal compliance dates around this period.
Year-round bookkeeping checklist (so August is boring)
TPAR is an annual lodgement, but the work is year-round. Here is what registered BAS agents and Xero-savvy bookkeepers usually check for tpar australia contractors clients:
- Code contractors correctly — separate reportable service purchases from ordinary suppliers. Tags, tracking categories or dedicated expense accounts help.
- Capture ABNs on supplier cards — verify ABNs early; chasing them in August is painful.
- Keep GST-inclusive payment totals available — bills and payments should reconcile so you can sum what was paid, including GST.
- Store invoices and remittance evidence — see also our guide on how long to keep business records in Australia.
- Review mid-year — if your mix of income is drifting toward (or away from) the 10% or “primarily” tests, flag it before EOFY.
- Do not dump everything into “Contractors” — a single catch-all account without ABNs or service type makes TPAR extraction guesswork.
- Catch up before August if books are behind — backlog reconciliation first; then report. Our catch-up bookkeeping guide covers getting history clean without shame.
Girl Friday Australia is a registered BAS agent, Xero Certified Advisor and Xero Gold Partner, with 20+ years experience, 100% Australian remote support and no lock-in contracts. Bookkeeping starts from $250/month and BAS lodgement from $180/quarter — see services for the full menu.
TPAR vs employee vs contractor classification
These are easy to confuse — they are related people questions with different rules.
- TPAR asks: did you pay contractors for specified services in industries that trigger Taxable Payments Reporting, and do you meet the lodging tests?
- Employee vs contractor (for PAYG withholding, STP and super) asks: is this worker an employee or a genuine contractor under ATO / Fair Work style factors?
You can have a genuine contractor for day-to-day engagement and still have TPAR reporting if the industry tests are met. You can also have someone you treat as a contractor who the ATO or a court would treat as an employee for SG or PAYG — that is a classification problem, not solved by lodging (or skipping) TPAR.
If you are unsure whether someone should be on payroll with PAYG and super rather than paid as a contractor, that often goes beyond BAS bookkeeping into income-tax and employment advice — speak to your tax agent or accountant (and get employment advice where needed). Our employee vs contractor bookkeeping guide explains how the books should look once the classification decision is clear.
Need help getting contractor suppliers, ABNs and Xero coding ready before the next 28 August? Get a free quote or start a conversation — or call 0404 877 436.
Frequently asked questions
Do I need to lodge a TPAR if I only paid one contractor?
Possibly — volume of contractors is not the main test. What matters is whether you are in a reportable service industry (or pay for those services on your behalf), whether you have an ABN, and whether you meet the 10% test or, for building and construction, the primarily / 50% test. One large subcontractor bill can still put you in scope. Check the ATO’s work out if you need to lodge a TPAR page against your figures.
What if I am not sure I need to lodge?
Work through the ATO decision steps with your year’s income mix and contractor payments. If you conclude you do not need to lodge, submit a non-lodgment advice (NLA) rather than doing nothing. If you are borderline on the 10% or primarily tests, speak to your tax agent or accountant before you decide.
Can I still lodge TPAR on paper?
No. Paper lodgments are no longer accepted. Lodge electronically through Online services, SBR-enabled software, or via a registered tax practitioner.
What amounts do I include — GST inclusive or exclusive?
Report the total amount paid including GST. Make sure your bookkeeping extract matches that basis.
Does TPAR mean my contractors automatically owe more tax?
TPAR is an information report to the ATO about what you paid. It does not by itself assess tax on the contractor. Contractors still handle their own income tax, GST and lodgements. Do not use TPAR as a substitute for correct contractor classification or for PAYG/super where someone is actually an employee.
My books are a mess and it is July — can I still get TPAR ready?
Yes. Prioritise: identify reportable-service suppliers, fix ABNs, reconcile payments, then extract GST-inclusive totals. Catch-up bookkeeping is normal — we help Australian SMBs clean that up remotely without judgment. Contact us or email info@girlfridayaustralia.com.
Who can lodge TPAR for me?
You can lodge yourself electronically, or engage a registered tax practitioner (including a registered BAS agent where that fits your engagement) to lodge through the appropriate channel. Girl Friday can help organise the books and, where appropriate as your registered BAS agent, support the compliance workflow — ask what is included when you request a quote.
Get contractor reporting under control
TPAR for contractors is manageable when ABNs, coding and GST-inclusive payment totals are clean all year. The hard part is usually not the form — it is discovering in August that “Contractors” in Xero is a mixed bag with missing ABNs.
If you want a registered BAS agent and Xero Gold Partner team to keep those records tidy Australia-wide, get a free quote, book a discovery call, call 0404 877 436, or email info@girlfridayaustralia.com.