How to make TPAR Reporting Easier

If your business pays contractors for certain services, you may be required to lodge a TPAR (Taxable Payments Annual Report) with the ATO. We’ll guide you through the details and give you tips that will streamline your TPAR process, save you time, and help you avoid penalties.

What is TPAR?

Most small businesses on the Sunshine Coast do the right thing and report their taxable income. The Taxable Payments Annual Report (TPAR) informs the ATO about payments your business has made to contractors for specific services. Which aims to improve tax compliance and make sure that contractors are also reporting their income accurately.

The TPAR basics

• You need to reconcile your books and files by 30 June each year before completing your TPAR.

• TPAR must be lodged by 28th August each year.

• From 22 March 2025, penalties apply for overdue TPAR lodgements.

  
  

Who needs to lodge a TPAR? 

TPAR reporting is mandatory for businesses in the following categories:

• Building and construction services

• Cleaning services

• IT services

• Security, investigation or surveillance services

• Courier services

• Road freight services

  
  

You will need to report your payments to contractors or subcontractors that have provided you with services. The report should also show the total amount you paid to the contractor if they have provided materials and labour. Payments that are made to suppliers where you paid for more than a product, also need to be reported. For example, when you hire: 

• a scissor lift and the EWP (Elevated Work Platform) operator 

• an excavator with an operator  

Some payments that you don’t need to report are payments for materials only, employee wages and unpaid invoices at the end of the financial year. Read more details about payments you don’t need to report.

You must lodge a TPAR if:

• Your business provides TPAR-reportable services, and

• Payments received for these services exceed 10% of your total business income

If payments for these services are less than 10% of your business income, you are not required to lodge a TPAR.

You can use the ATO’s step-by-step guide to determine your reporting obligations here: Work out if you need to lodge a TPAR.

What details do you require from each contractor to make TPAR reporting easier?

When lodging your TPAR, you’ll need to provide the following information for each contractor (payee): 

• Business Name (The registered business name should be the same as shown on the invoice) 

• ABN (Australian Business Number) 

• Phone Number 

• Individual’s Name (if not a company, and the names should match the invoice) 

• Address 

• Total GST or Total Tax Withheld (if ABN not quoted) 

• Total 

• Gross Amount Paid 

Missing or inconsistent information can lead to queries from the ATO and even penalties. 

What Can You Do to Make TPAR Reporting Easier? 

Here are some practical tips to simplify your TPAR reporting process: 

1. Smart Set-up of Contractors in Your Accounting Software 

As you receive invoices, update your accounting software contacts with all the contractor details: 

• Business name, ABNs, phone numbers and address 

• Saving this upfront is much quicker than losing time chasing missing information down the track 

• In Xero, add your contractor to the TPAR category, because the software will then automatically pull relevant payment information into the report, saving more time 

• This also mean you won’t need to review each individual payment to determine if they are a contractor for TPAR reporting or not 

2. Regularly Review Contractor Data 

• Review and update contractor details at regular intervals throughout the year, e.g. quarterly. 

• This reduces errors and ensures your TPAR is accurate and complete 

• Taking the pressure off and saves time when lodgement is due 

3. Stay Ahead of Deadlines 

• Set multiple recurring annual reminders in the lead up to 28th August deadline 

• Set an early TPAR completion date to give yourself enough time to chase any outstanding information and avoid last-minute stress and potential penalties 

How a better workflow slashed TPAR Time by two-thirds for a busy tradie 

A Sunshine Coast electrician came to us overwhelmed. They’d been spending over 6 hours preparing their TPAR for 49 contractors. 

Our bookkeeping team helped them streamline their Xero setup, walked them through the ATO's reporting requirements, and showed them how to correctly tag contractors for TPAR reporting. 

With this support, they began recording contractor details as invoices came in. Then Xero’s automatic category linking did the heavy lifting at reporting time. 

Now, their TPAR takes less than 2 hours to finalise. Saving them a huge amount of time and taking a massive weight off their shoulders. 

How can ABA Advice Beyond Accounting help you make TPAR reporting easier? 

The team at ABA partners with Sunshine Coast businesses like yours to make TPAR reporting easier and give you back time to focus on what you do best. If you're not sure whether you need to lodge or want to streamline your TPAR reporting, we’re ready to help. Our Birtinya-based accountants and bookkeepers specialise in supporting trade and construction businesses. 

Book your free discovery meeting with the ABA team today and get your TPAR on track now!