If your business pays contractors for services in specific industries, you may be legally required to lodge a TPAR each year. Timely reporting is crucial to avoid penalties and maintain compliance.
Do You Need to Lodge a TPAR?
Businesses that engage and pay contractors for any of the following services are generally required to submit a TPAR:
- Building and Construction Services
- Cleaning Services
- Courier or Road Freight Services
- Information Technology (IT) Services
- Security, Investigation, or Surveillance Services
If your company operates in one of these sectors and outsources work to contractors or subcontractors, you are likely obligated to report these payments to the ATO.
What Contractor Details Should Be Reported?
When preparing your TPAR, ensure that you collect and report the following information for each contractor:
- Contractor’s Full Name
- Business Address
- ABN (Australian Business Number)
- Total Amount Paid Over the Financial Year
Accurate reporting helps the ATO match data and detect unreported income, promoting transparency and accountability.
Key TPAR Lodgement Deadline
The annual deadline to submit your TPAR is 28 August. Missing this deadline can result in Failure to Lodge (FTL) penalties, which may escalate based on the size of your business and how overdue the lodgement is.
To avoid late fees and compliance reviews, make sure to mark this date and submit your report on time.
Tips for businesses:
- Ensure the contractor gives you the full information on their invoice before paying them
- Make sure your accounting software records the payment as a TPAR payment. There is generally a tick box somewhere. That way you can upload the information electronically.
- If you only have a few contractors, it may be easier just to lodge through your Business Portal
Important Reminder for Contractors
If you are a contractor, it’s vital to understand that income you receive from TPAR-reporting clients will be disclosed to the ATO. To stay compliant:
- Maintain thorough records of your earnings
- Accurately report your income when lodging your tax return
This ensures you’re not flagged for inconsistencies and helps avoid potential audits or fines.
How to Get Help With TPAR Lodgement
Not sure if your business is required to lodge a TPAR? Or do you need help compiling contractor payment details? It’s a good idea to speak with a registered tax agent or BAS professional who can guide you through:
- Understanding your lodgement requirements
- Organising the necessary contractor information
- Submitting your TPAR correctly and on time
For official information and resources, visit the ATO’s website: ato.gov.au/TPAR
