If your business uses contractors, you may need to lodge a TPAR each year.
TPAR lodgements, or Taxable Payments Annual Reporting, is designed to help the ATO match income declared by contractors with payments they receive.
TPAR is due on 28 August each year and is required for businesses in certain industries (e.g. building & construction, cleaning, couriers, IT, security, road freight) that pay contractors. You need to report the total paid to each contractor for in-scope services, including GST, but employee wages, supplies-only purchases, and private/domestic services are not reported.
For many small businesses, the hardest part of TPAR isn’t the lodgement itself — it’s sorting out the records to get the right totals. Here’s what you need to know, and the best bookkeeping practices to make TPAR season stress-free.
There are some specific rules around who has to report under TPAR.
It’s important to note that TPAR is generally a self-reporting function – the ATO won’t necessarily know if you need to lodge, and it will be up to you to determine if you meet the criteria and then voluntarily submit by the due date.
If you fall into any of the following categories then you need to report under TPAR…
You are in the building and construction industry and you pay contractors for construction services. Keep in mind there is no turnover threshold for this industry – all businesses in this industry must report.
Your business earns revenue from any of the following Taxable Payments Reportable Services (TPRS) and payments you receive from these services are 10% or more of your GST turnover:
– Cleaning services
– Courier services
– Road freight services
– Information technology (IT) services
– Security, investigation or surveillance services
Note: in the above industries, you only report the payments made to contractors for the in-scope services. Employee wages and non-related services are excluded.
Good recordkeeping through the year will make TPAR reporting a breeze.
By understanding what you need to report you can be more organised when allocating your contractor payments during the financial year. If you’re not sure where to start, the following tips should make this a lot easier.
Always record contractors as “Contacts” in your accounting software. Create a supplier profile for every contractor and add their ABN, business name, and address details. Ensure you allocate all their payments to the correct contact as this allows the year-end contractor totals to be pulled straight from the standard reports.
💡Hint: In Xero or QuickBooks add the contact to your TPAR supplier list.
Allocate expenses to the correct expense category. Use separate account categories that match the service type (e.g. Cleaning, Building Repairs, Courier). Don’t lump everything into “Contractor Expenses” — it will make splitting reportable vs. non-reportable harder.
💡 If a supplier provides multiple services (e.g. cleaning + management), separate them into different account codes at the time of entry.
Attach invoices and receipts. Save the PDF or scanned invoice to each transaction in your accounting software (eg Xero or QuickBooks) or store in your file system (eg Hubdoc or Dext). This makes it easier to check later if you need to confirm details
💡This is also very helpful if your accountant needs to confirm GST amounts or other details when preparing your lodgement.
Check ABNs and GST registration. Use the ATO ABN Lookup to verify each contractor’s ABN and GST status when doing the allocations. Record this in their contact record — it helps with BAS accuracy as well as TPAR lodgement.
💡 Don’t forget, if a contractor doesn’t provide an ABN, you may need to withhold PAYG withholding at 47% & this also gets reported on the TPAR.
Reconcile bank transactions promptly before you forget what it is for. Avoid categorising expenses without allocating to a contact, as these won’t appear in your TPAR reports. Also, ensure that you split payments that are non-reportable at the time of allocation.
💡Avoid bulk allocations where expenses are not assigned to a contact and take care to select the right expense categories.
Run contractor reports quarterly. At least once a quarter, run a report of payments by supplier to confirm that all contractors are being captured correctly. Also good to check that GST is applied consistently and fix if needed, This avoids a big clean-up in July/August.
💡Regular reviews will save time later and will help identify any potential issues early – avoid that last minute stress!
It’s not always about having to make more money…it’s just as important to manage (and keep) what you already have.
When you’re flat out, it’s easy to glance at your bank balance and assume those funds are free to spend. But managing cashflow this way can quickly lead to trouble. The good news is, you don’t need to have a complicated system, just a regular process for putting money aside to cover things like GST, tax and super. We do this in our own business and it means that when those quarterly or annual bills start rolling in, we don’t need to stress. The money is there and ready to be paid on time, every time.
To help make this as easy as possible, try the following…
set up separate bank accounts to move your money into so it’s harder to access. You don’t need to have separate savings accounts for each type of expense (unless you want to) but if you do have all your savings in one account, keep track of how much is accumulating for GST, super, PAYGW and income tax. That way you can monitor to see if you’re putting enough aside for each or if you need to make adjustments.
find a regular time each week to look at what money has physically been paid to your business and then transfer out a portion of this to the separate account/s. In our business, we do it each week at the same time we process payroll and now it’s become part of the routine.
make sure you connect all these accounts to your accounting software so you can keep track of all the funds you’ve put aside.
Information is power…make sure you know how to find information about your business online and update things as needed.
These days, just about everything for your business—lodgements, registrations, and info—is managed online. Unfortunately, not all of those systems actually talk to each other, so you need to make sure that you update your info in all the important places. It can get a bit confusing, so we’ve pulled together the key systems and departments you’ll need to access to keep everything running smoothly.
The first thing you’ll need to do is setup myGovID. This is your secure digital identity and your online key to access a range of government systems and information online.
Relationship Authorisation Manager is where you connect up your business to your personal myGovID. This allows you to use your myGovID to log into a bunch of government systems and see or update details for the business as well as yourself personally.
Using your myGovID, you’ll be able to access ATO Online for business. and see all the tax, lodgement and payment info for your business.
Access Manager is where you can give other people access to manage your business’ information online. This might include employees, spouses or advisors who you authorise to act on your business’ behalf.
As an officeholder, ASIC Connect is where you log in to update details about your company such as addresses or changes to directors and shareholders. You also register business names through ASIC so if you need to renew or change details about your business name you will need to have access setup with ASIC.
The Australian Business Registry (ABR) manages your ABN. If you need to update details about your ABN such as business locations, your ANZSIC code, key contacts or other general business details, then you do this via the ABR.
There’s obviously a whole lot more to running a business and this guide is intended to give you the key highlights to get you off on the right foot. You know the old saying “you don’t know what you don’t know”….well we wanted to make sure you know enough to ask the right questions and can avoid missing important deadlines that can get you into trouble.
These last few tips are some things that don’t come up all that often, but are a bit curly and might not be something you are necessarily on the lookout for…
before you pay an invoice to a supplier that is over $75, make sure they have quoted their ABN on the invoice. If they haven’t, you are required to withhold the top rate of tax from this payment and send it to the ATO.
make sure that you have checked your invoice templates and it includes all the right business details as well as the total amount and tax breakdowns.
if you are in a business that has to lodge a TPAR each year, try to make sure you collect the right details from your contractors each time you pay them. At a minimum, make sure they have provided their ABN or if not, they provide a written statement to confirm why they don’t need an ABN.
reach out to a trustworthy broker if you’re not sure what type of insurance coverage you need. It’s important to make sure you have the right type of policies to protect you and your family if you can’t work, as well as liability insurances in the event someone else suffers injury or losses.
check out our FAQ’s page for other common questions and answers.
You don’t have to do it alone…Wingr is here to provide as much support as you need along your business journey.
We understand the need to watch every dollar when your business is new and cashflow is bit uncertain. However, it’s important to get advice when you need it to avoid costing you more down the track.
We have found that targeted training sessions are a great way to get the information you need, for a fixed cost. That way, you only pay for the time you need and we can structure the sessions to cover the areas that you’re having the most trouble with…bookkeeping or payroll training, general questions & guidance or even just reviewing your setup to make sure you haven’t missed anything.
You can sleep better at night with a business wingman.
