TPAR Reporting - What you need to know

Payee details you need to report

The details you need to report about your contractors are generally contained in the invoices or grant applications you receive from them.

The details you need to report for each payee include the:

• ABN (where known)
• name (business name or individual's name)
• address
• total amounts for the financial year of the    
  • gross amount paid (including GST plus any tax withheld)
  • total GST you paid them
  • total tax withheld where ABN was not quoted.

Use Category 3 to include/exclude a creditor from the TPAR report.

New report listing & totaling creditor invoices. Option for summary or detailed report. 

Additionally, if you are a government entity, you will also need to report:

• whether a Statement by a supplier was provided
• details of any grants paid to people or organisations that have an ABN, including the    
  • date the grant was paid
  • name of the grant or grant program.

When you receive an invoice, check that the ABN on the invoice matches the ABN on your record for that contractor. Ensure you create a new contractor record if necessary. Where a contractor's ABN changed during the year, you will need to include each ABN for that contractor in your report.

You can check your contractors' details including ABN, name and GST registration to confirm they are correct by using ABN Lookup on the ABR website or the ATO app.

Depending on whether you lodge the paper form or lodge online, we may ask you to include additional information where it is known to you. This additional information may include the contractor’s phone number, email address and bank account details (where they are paid by electronic bank transfer).

Payments businesses don't need to report

There are some payments you don't report on the TPAR. These include:

• Payments for materials only
• Payments for incidental labour
• Unpaid invoices as at 30 June each year
• PAYG withholding payments
• Payments within consolidated groups
• Payments for private and domestic services

Payments for materials only

You are not required to report payments if the invoices are for materials only.

If you pay a contractor for invoices for both materials and labour, and at other times pay the same contractor for materials only, it can be difficult to work out the payments made for materials only. In this situation, you can choose to report all the payments you make to this contractor.

Incidental labour

Where invoices you receive have amounts for both materials and labour, you can exclude the labour amount if it is incidental to the supply of the materials.

A payment for labour is considered to be incidental if the labour component is immaterial to the actual supply of the material.

Example: Incidental labour component

Kevin purchases a stock of new taps from Harry's Hardware to install in a commercial building. Harry installs one tap by way of demonstration, so that Kevin knows how to install the rest.

Harry's Hardware invoices Kevin for the taps and includes a small amount for the labour to demonstrate the installation. Kevin does not need to report the payment he makes to Harry's Hardware because the labour component of installing the tap is incidental to the supply of the materials.

Example: Not incidental labour component

An electrical business provides labour and materials for various electrical applications. A builder pays the electrical business for the supply and installation of wiring in a commercial fit-out he is managing. As the provision of the installation service is a building and construction activity and more than incidental to the supply of materials, the builder will be required to report the total payment made to the electrical business. The builder is carrying on a business that is primarily in the building and construction industry.

Unpaid invoices as at 30 June each year

Only report payments that have been paid on or before 30 June each year.

For example, if you receive an invoice in June but you don't pay that invoice until sometime in July, you will report that payment in the next financial year (the year in which you actually paid it).

PAYG withholding payments

Report pay as you go (PAYG) withholding payments in your PAYG withholding annual report or through single touch payroll, not your TPAR. Examples include payments to:

• employees
• workers engaged under a voluntary agreement to withhold
• workers engaged under a labour-hire or on-hire arrangement. This includes a labour hire firm that hires workers under a labour-hire arrangement to provide services.
• foreign residents for work performed in Australia. These payments are generally subject to PAYG foreign resident withholding. (If the payments are not subject to PAYG withholding, then you need to report them in the TPAR).
• foreign residents for work performed overseas.

Contractors who don't quote an ABN

If an ABN isn't provided, you must withhold under the PAYG withholding arrangements.

You can report these amounts withheld in either the:

• TPAR, or
• PAYG withholding where ABN not quoted – annual report.

Only report this information in one of these annual reports, not both.

See also:

• PAYG withholding and labour-hire firms
• Withholding from payments to foreign residents for construction and related activities
• When a business doesn't quote its ABN

Payments within consolidated groups

If you’re in a consolidated, or multiple entry consolidated group for income tax purposes, you don’t need to report payments you make to another member of that same group. This is because members of a consolidated group, or multiple entry consolidated group, are effectively taxed as a single entity. You only need to report payments to contractors for services who are outside the consolidated group.

Example: Payments to contractors within a consolidated group Brick Co and Paint Co are both members of the same consolidated group for income tax purposes. Brick Co provides building services and makes a payment to Paint Co for painting its building project. Because Paint Co and Brick Co are in the same consolidated group, Brick Co won't have to report on the payment made to Paint Co for the provision of painting services.

However, Brick Co will have to report on payments made to entities outside the consolidated group for the supply of building and construction services. Payments for private and domestic projects

Payments for private and domestic projects

You don't need to report if you are:

• an individual not running a business and you make payments to contractors for services – for example, if you are a homeowner building or renovating your own home
• a business making payments to contractors for services for private purposes – for example, cleaning your own home.

If the work is in relation to carrying on a business, the amounts paid to the contractors for this work need to be reported. These are payments for which businesses can claim a tax deduction (for example, payments to contractors).

Example: Homeowner paying for building and construction services

Kristyn, who has an ABN for the purposes of running a bookkeeping business, manages the construction of her new home and makes payments directly to the contractors.

Kristyn won't be required to report payments she makes to contractors because she is undertaking the activity in a domestic capacity, not as a business.

John is a builder and runs SF Builders as a sole trader. He is currently doing renovations on his own house and has engaged ML Carpets to handle the installation of new carpet.

As this renovation is private and not part of John’s or SF Builders’ business, the payments he makes to ML Carpets are not reportable.

Example: Mixed personal and business payments in the cleaning industry

Svetlana is a sole-trader with an ABN who runs her own cleaning agency.

Clients contact her asking for their homes and offices to be cleaned. Svetlana keeps a list of contract cleaners she engages and pays for each cleaning job.

Svetlana asks one of these contractors to clean her own home and pays the contractor for this from her personal bank account.

Svetlana is required to report the payments made to contractors that undertake cleaning services for her clients. However, Svetlana is not required to report the payment made to the contractor for cleaning her own home, as this is a payment made by Svetlana in her private capacity and not as part of her business.

Example: Land owner paying a project manager

Maya owns land and has engaged a project manager George to manage the development of a building on her land.

Maya's business activity is purchasing and selling property. Maya is not carrying on a business primarily in the building and construction industry, and therefore is not required to report payments she makes to George.

Example: Payments to property managers

Jim only purchases properties for rental purposes and engages a property manager. Jim is not required to report the payments he makes to the property manager because he is not carrying on a business that is primarily in the building and construction industry.

Susan is a property manager and pays a plumber to fix a burst water pipe on a property. The property manager’s business activity is managing investments, they are not considered to be a business that is primarily in the building and construction industry. As a result, Susan doesn't need to report the payments made to the plumber.

However, if Susan creates a separate entity to manage the building maintenance of the property, this entity will need to report the payments to the plumber – this is because the separate entity is considered to be primarily in the building and construction industry.

Lodging your TPAR

Your Taxable payments annual report (TPAR) is due by 28 August each year. Penalties may apply for not lodging your TPAR by the due date.

Use the lodgment method that best suits your business:

• Lodging online
• Business and sole traders
• Government
• Tax professionals
• Lodging on paper

See also:

Correcting a lodged report

Failure to lodge on time penalty

TPAR Non-lodgment advice

Lodging online

Lodging online is a secure and quick way to meet your reporting obligations. There are inbuilt checks to ensure you complete the report correctly. You'll receive an online confirmation once your TPAR is lodged.

Next steps:

Business and sole traders

Government

Watch:  

Business and sole traders

Using business software

If you have business software that can create a TPAR data file to the required specifications External Link, you can lodge online through either:

the ATO Business Portal, using the file transfer function

directly through your business software if it's SBR-enabled External Link – talk to your adviser or software provider about SBR-enabled software.

You will receive validation and a confirmation that the report has been lodged.

If you don’t have business software

If you don’t have business software that offers TPAR, you can lodge online through either:

the ATO Business Portal – select Online forms from the menu, then Taxable payments annual report

Online services for individuals and sole traders (myGov account) – select Tax, then Lodgments, then Taxable payments annual report.

To use the Business Portal you need an Australian business number (ABN)External Link and a secure credential such as myGovID and Relationship Authorisation Manager (RAM).

Your tax or BAS agent can also lodge on your behalf.

See also:

Accessing online services with myGovID and RAM

Getting started with ATO online services (myGov)

Tax professionals

Tax agents and BAS agents can lodge TPARs for their clients by using:

file transfer or via SBR-enabled software

Online services for agents

To access Online services for agents you need a secure credential such as myGovID and Relationship Authorisation Manager (RAM).

Online services for agents allows agents to:

view a client's outstanding TPARs in the For action screen, or under Lodgments

confirm previous lodgments in the History section

lodge TPARs for their clients through the online form, removing the need to lodge by paper.

Next steps:

Online services for agents

myGovID and Relationship Authorisation Manager (RAM)

Lodging on paper

If you cannot access any of the online options you can lodge a paper Taxable payments annual report (NAT 74109) form

In order to avoid unnecessary delays in your lodgment being processed, make sure you:

• use the original coloured form you order from us
• do not use photocopies of the form
• do not send in formats such as scanned images of forms, screen prints, spreadsheets or word processing files (for example, .pdf, .doc, .xls, .jpg, .tiff), as we cannot accept these.

Note: Government entities cannot lodge on the paper form.

Ordering the form

You can order the form either:

• online through the ATO publications ordering service External Link – insert the NAT number 74109 in the search bar
• by phoning our automated Publications ordering service on 1300 720 092.