- Applies to: Australia
- ✓ Verified Nov 2, 2026 · 1 official source
ATO Compliance Desk · Australian Sole Trader & Tradie Rules
Under ATO rules for "TPAR Australia 2026: ATO Taxable Payments Annual Report & 28 August Guide", Australian sole traders pay marginal resident income tax (0% up to A$18,200; 16% on A$18,201–A$45,000; 30% on A$45,001–A$135,000 plus 2% Medicare levy), manage quarterly PAYG instalments, and retain digital expense receipts for 5 years.
Key Takeaways
- ABN & 47% Withholding Rule: Always display your active 11-digit ABN on every quote and invoice; otherwise business payers must withhold 47% under ATO PAYG rules.
- GST & BAS Threshold: Register for 10% GST at A$75,000 annual turnover and lodge quarterly BAS by 28 October, 28 February, 28 April, and 28 July.
- Record Retention: Section 262A of the Income Tax Assessment Act 1936 requires keeping digital or paper tax invoices and expense receipts for 5 years from lodgment.
“As a sole trader, you use your individual tax file number (TFN) when lodging your income tax return, report all business income and deductions in the business items section, and must keep records for 5 years.”
TPAR Australia 2026: ATO Taxable Payments Annual Report & 28 August Guide
Short answer: A TPAR (Taxable Payments Annual Report, ATO form NAT 74109) is a mandatory annual report lodged with the Australian Taxation Office by 28 August each year by businesses and sole traders that pay contractors or subcontractors for relevant services. You must lodge a TPAR if you have an ABN, pay contractors in building and construction (50% or more of business income/activity) or cleaning, courier/road freight, IT, or security (10% or more of business income), and report every contractor payment made on a cash basis between 1 July and 30 June.
⚡ Instant Australian TPAR (
NAT 74109) & Subcontractor GST Calculator ($AUD): Calculate your Australian sole trader GST, Simpler BAS, and subcontractor payment totals right below, export a🔗 Embed / CSV Template, save 5 Free Saves in iCloud Web Workspace at/keel/workspace/, or Download Keel Free on the App Store (AU & NZ Sole Traders CPP) (AU & NZ Sole Traders Overview) to keep subcontractor ABNs, GST invoices, and Bunnings thermal dockets organised by job offline.
The ATO uses data from the Taxable Payments Reporting System (TPRS) to pre-fill and cross-check income on sole traders’ and subcontractors’ tax returns. Whether you are a builder who hires subbies for plumbing and electrical rough-ins, or a subcontractor whose own ABN payments are being reported to the ATO by main contractors, understanding how a TPAR works prevents both late-lodgment penalties and automated ATO data-matching audits. For broader GST and quarterly reporting rules, see what is a BAS statement and how to invoice as a sole trader in Australia.
Who must lodge a TPAR with the ATO?
Under the ATO’s work out if you need to lodge a TPAR rules, you must lodge a TPAR if you hold an Australian Business Number (ABN), make payments to contractors (including sole traders, companies, partnerships, or trusts) for services, and meet the threshold for one of the six TPRS industries:
| Industry Category | Threshold to Trigger TPAR | Common Trade & Service Examples |
|---|---|---|
| Building and construction services | 50% or more of your business income or business activity comes from building and construction services | Carpentry, plumbing, electrical, roofing, painting, tiling, concreting, earthmoving, bricklaying, HVAC, fencing |
| Cleaning services | 10% or more of your total GST turnover comes from cleaning services | Commercial, residential, builder’s clean, carpet, window, and high-pressure exterior cleaning |
| Courier and road freight services | 10% or more of your total GST turnover comes from courier or road freight services | Parcel delivery, hot-shot ute courier runs, pallet transport, and truck owner-drivers |
| Information technology (IT) services | 10% or more of your total GST turnover comes from IT services | Software development, web/system design, IT support, cybersecurity, and network installation |
| Security, investigation or surveillance | 10% or more of your total GST turnover comes from security/investigation services | Crowd control, site security patrols, alarm monitoring, and locksmithing linked to security |
If you meet the industry threshold for the financial year (1 July to 30 June) but did not pay any contractors during that year, you do not need to lodge a full TPAR—instead, you submit a TPAR Non-Lodgment Advice (NLA) through ATO Online Services in myGov so the ATO stops sending overdue reminders.
When is the TPAR due date?
The statutory TPAR due date is 28 August every year, covering contractor payments actually made during the financial year that ended on 30 June.
| Financial Year Covered | Contractor Payments Paid Between | TPAR / Non-Lodgment Advice Due Date |
|---|---|---|
| 2025–26 | 1 July 2025 – 30 June 2026 | 28 August 2026 |
| 2026–27 | 1 July 2026 – 30 June 2027 | 28 August 2027 |
Unlike a quarterly BAS due date, registered tax and BAS agents do not receive an automatic extension past 28 August for lodging a TPAR. Failing to lodge on time can trigger ATO failure-to-lodge (FTL) penalties calculated in penalty units for every 28-day period the report remains overdue.
Does TPAR use cash or accrual accounting?
TPAR is strictly reported on a cash basis, regardless of whether you lodge your BAS or income tax return on a cash or accruals basis.
That distinction catches many builders and tradies out at year-end:
- Invoice paid on 29 June 2026: Goes on the 2025–26 TPAR (due 28 August 2026).
- Invoice dated 25 June 2026, but paid on 3 July 2026: Goes on the 2026–27 TPAR (due 28 August 2027), because the money left your bank account in July.
Which contractor invoices go on a TPAR (and which do not)?
You report payments made to contractors for services, including invoices that combine labour and materials. You exclude invoices that are solely for materials or equipment with no labour component.
| Payment / Invoice Type | Report on TPAR? | ATO Rule & Explanation |
|---|---|---|
| Labour-only subcontractor invoice (e.g., $2,200 plastering labour) | Yes | Pure service payment; report the full gross amount paid including GST |
| Combined labour and materials invoice (e.g., $4,400 electrical rough-in + cable) | Yes — in full | If a single invoice includes both labour and materials, report the entire invoice total unless labour is purely incidental |
| Materials-only trade counter invoice (e.g., Bunnings, Reece, Middys timber/pipe) | No | Supply of goods only; excluded from TPAR (unless delivery/installation was a separate service contract) |
| Equipment hire without an operator (dry hire of an excavator or scissor lift) | No | Dry hire of equipment without a driver/operator is excluded |
| Equipment hire with an operator (wet hire of a bobcat and operator) | Yes | Wet hire is a construction service; report the total paid |
| Employees paid under PAYG withholding (wages and salaries) | No | Already reported through Single Touch Payroll (STP) |
| Unpaid contractor invoices as at 30 June | No | Report them next year when they are actually paid |
What details must you record from each subcontractor’s invoice?
Every detail required for your TPAR is already printed on a compliant Australian tax invoice. For each contractor you pay during the financial year, the ATO requires:
- Australian Business Number (ABN): The contractor’s 11-digit ABN (verify it on ABN Lookup before paying).
- Name: The contractor’s legal name (for a sole trader, their individual legal name) and any registered business/trading name.
- Address: Street, postal, or business address shown on their invoice.
- Gross amount paid (including GST): The total cash paid to that contractor between 1 July and 30 June, inclusive of any 10% GST and before subtracting any tax withheld.
- Total GST included: The exact GST component included in the gross payments (if the contractor is GST-registered; enter
$0if they are not registered for GST). - Total tax withheld where no ABN was quoted: Any 47% PAYG withholding deducted because the supplier failed to provide a valid 11-digit ABN on a payment over $75 (excluding GST).
Worked Example: Reconciling Three Subcontractors for a Builder’s 2026–27 TPAR
Suppose a sole trader renovation carpenter in Sydney earns 100% of their income from building services and pays three contractors between 1 July 2026 and 30 June 2027:
| Payee | GST Registered? | Invoices Paid in 2026–27 | Gross Paid (incl. GST) on TPAR | Total GST on TPAR |
|---|---|---|---|---|
| Apex Plumbing Pty Ltd (Labour + copper pipe) | Yes (10% GST) | $6,600 paid Oct 2026 + $4,400 paid Mar 2027 | $11,000 | $1,000 |
| Liam O’Connor (Sole trader tiler — under $75k) | No (0% GST) | $3,200 paid Feb 2027 | $3,200 | $0 |
| Bunnings Trade (Timber & fasteners only) | Yes (10% GST) | $8,800 paid across year | Not reported (Materials only) | Not reported |
What if you are a subcontractor whose income is reported on someone else’s TPAR?
If you work as a subbie in building, cleaning, courier, IT, or security, the businesses that paid you report your ABN and gross payments to the ATO by 28 August. Those figures appear in the pre-fill report inside myTax (or your tax agent’s portal) when you prepare your sole trader tax return.
Always reconcile the ATO’s pre-filled TPAR figures against your own sequential invoice log before lodging:
- GST mismatch: TPAR reports your gross payments including 10% GST, whereas your individual tax return business schedule requires your GST-exclusive income if you are registered for GST. Never accept the raw TPAR gross figure as net taxable income without stripping out the 10% GST you already remitted on your BAS.
- Timing mismatch: Because payers report on a cash basis, an invoice you issued in June and paid in July will not appear on the payer’s TPAR until the following year.
How to lodge a TPAR online via myGov and keep records with Keel
Sole traders can lodge a TPAR directly for free through ATO Online Services for individuals and sole traders (linked to myGov): go to Tax → Lodgments → Taxable payments annual report, enter each contractor’s ABN, name, address, gross amount paid, and GST, review the summary, and submit.
Keel: Invoice Generator is an on-device iOS record-keeper for solo tradies and contractors. It stores your issued PDF invoices, photographed supplier receipts, and subcontractor bills under each job with zero bank connection. While Keel does not lodge TPAR forms or connect to the ATO, keeping every subbie tax invoice and material docket filed under its job means your 28 August numbers take minutes instead of a weekend. Download Keel free on the App Store.
Frequently asked questions
What does TPAR stand for in Australia?
TPAR stands for Taxable Payments Annual Report (ATO form NAT 74109). It is an annual report that businesses and sole traders in building and construction, cleaning, courier and road freight, IT, and security/investigation industries lodge with the ATO by 28 August to report payments made to contractors and subcontractors for services during the previous financial year (1 July to 30 June).
Do sole traders have to lodge a TPAR?
Yes, if you hold an ABN, operate in one of the reportable TPRS industries (meeting the 50% threshold for building and construction or the 10% threshold for cleaning, courier/road freight, IT, or security), and paid other contractors or subcontractors for services during the financial year. If you operate in a reportable industry but paid no contractors all year, you lodge a TPAR Non-Lodgment Advice (NLA) in myGov instead.
Do I report GST-inclusive or GST-exclusive amounts on a TPAR?
You report the Gross amount paid (including GST) in the main payment box, and then report the Total GST component in the separate GST box alongside it. If a subcontractor is not registered for GST, their gross amount paid is the total on their invoice and the GST box is recorded as $0.
Do I include materials on a TPAR?
If a contractor sends you a single invoice that includes both labour and materials (for example, an electrician billing for both wire and installation), you report the entire invoice amount on your TPAR. If an invoice is only for materials or goods (such as a hardware store or trade counter purchase with no installation service), you do not include it on your TPAR.
What happens if I paid a contractor who did not provide an ABN?
If a contractor does not quote a valid 11-digit ABN on a supply over $75 (excluding GST) and does not provide a valid Statement by a supplier (NAT 3346), you are legally required to withhold 47% from their payment and remit it to the ATO. You then report both the gross payment and the 47% tax withheld on your TPAR.
This article is general information, not tax advice. Consult the ATO or a registered Australian tax or BAS agent.
| ATO Compliance Line Item | Statutory Rule / Rate | A$95,000 Gross Turnover Example | Net Cash / Tax Impact (AUD) |
|---|---|---|---|
| Gross Invoiced Sales (Incl. 10% GST) | 1/11th GST component (A$75k+ threshold) | A$95,000 incl. GST (A$86,364 ex-GST) | A$8,636 GST collected for BAS |
| Deductible Trade Expenses & Logbook Km | A$19,800 expenses (incl. A$1,800 GST) + 5,000 km @ 88c | A$18,000 ex-GST + A$4,400 car claim | -A$1,800 GST credit → A$6,836 net BAS |
| Taxable Sole Trader Net Profit | Ex-GST Income minus allowable deductions | A$86,364 - A$22,400 = A$63,964 | Assessed at 2025–26 resident brackets |
| Income Tax + 2% Medicare Levy | 0% to A$18.2k · 16% to A$45k · 30% to A$135k | A$9,977 income tax + A$1,279 Medicare | A$11,256 total tax (17.6% effective) |
Calculated using 2025–26 resident tax rates (Stage 3 tax cuts) and 88c/km ATO cents-per-kilometre rate. Verify PAYG instalments via myGov/ATO Online.
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