I paid subcontractors last year — do I have to lodge a TPAR by 28 August?

You run a cleaning round, a small building outfit, a courier business, or a shop that also installs what it sells. Over the past year you paid people who work on their own ABNs — a second cleaner for Saturday jobs, a carpenter for a fortnight, a driver who covers the runs you can't. What's on your mind right now is the tax return.

The form that falls due first is the Taxable payments annual report, and it is due by 28 August each year. It isn't a tax return, no money is attached to it, and it changes nothing about what you owe. It is simply a list of who you paid. That is precisely why it gets left until it is overdue — and why the ATO's penalty rules treat leaving it differently from leaving almost anything else.

Six industries, plus the test that catches everyone else

The services covered by the taxable payments reporting system are building and construction, cleaning, courier and road freight, information technology, and security, investigation or surveillance. If your business provides one of those services, paid contractors or subcontractors to deliver it on your behalf, and has an ABN, a TPAR is in play. Contractors here include subcontractors, consultants and independent contractors, and they can be sole traders, companies, partnerships or trusts.

The part that catches people is what happens when the covered service is only a slice of what you do. Then there is a percentage test: add up what your business received for the relevant service during the year, divide by your business income, and multiply by 100. Ten per cent or more and you must lodge; under ten per cent and you don't. If you provide both courier and road freight, you combine the payments for the two before running the test. If you've been trading less than 12 months, you use projected business income for the next full year instead.

The ATO's own worked example lands exactly on the line: a building maintenance business with $100,000 of income and $10,000 of it from office cleaning hits 10% precisely, and must lodge. Ten per cent is inside, not outside. So the shop that arranges installations, the maintenance company that also does office cleans, the IT reseller that also does support work — none of them think of themselves as being in one of these industries, and all of them can end up over the line.

Building and construction runs on a different test. There is no 10% threshold; instead you are treated as primarily in the industry if any one of three things is true: 50% or more of your business income this year came from building and construction services, or 50% or more of your business activity relates to them, or 50% or more of your income in the year immediately before came from them. That last limb matters. A year that drops below half can still carry a lodgment obligation on the strength of the year before it.

What goes in, and what stays out

You report the total you paid each contractor for the relevant service, and the records you need for each of them are short: name, address, ABN, and the amount you paid including GST. Where an invoice covers both labour and materials, you report the total payment rather than trying to split it.

The exclusions are longer and they are where most of the errors sit. Payments for materials only are out. So is incidental labour — the ATO's example is a hardware supplier invoicing for taps and adding a small amount for installing one of them to demonstrate. Invoices still unpaid at 30 June are out, because you only report payments actually made on or before 30 June. Workers engaged through a labour hire or on-hire arrangement are out. Employees are out, because those go through Single Touch Payroll. Payments to foreign residents for work performed in Australia are generally subject to PAYG foreign resident withholding and are excluded on that basis. A contractor who didn't quote an ABN gets reported either in the TPAR or on the no-ABN withholding form, but only one of them, not both. Payments between members of a consolidated group are out.

And private and domestic work is out on both sides. A homeowner managing the build of their own house reports nothing, even if they hold an ABN for an unrelated business. And in the ATO's cleaning example, an owner who sends one of her contractors to clean her own home, paid from her personal account, reports every client job and not that one.

If you don't have to lodge, that is also something you file

This is the step almost nobody knows about. If you work through the test and land under the threshold, or you simply didn't pay any contractors this year, there is a non-lodgment advice form to submit — and the ATO's line is that TPARs and non-lodgment advice forms are both due by 28 August each year. The form takes multiple years at once and lets you tell the ATO you won't need to lodge in future years, which is the clean way to stop the reminder letters arriving every August for a business that has moved on from using contractors.

One practical note on lodging: paper is gone. Paper TPAR lodgments have not been accepted since 28 August 2025. It goes through SBR-enabled accounting software, Online services for business, Online services for individuals and sole traders, or your registered tax or BAS agent.

Why owing nothing doesn't protect this one

Failure to lodge on time penalties run at one penalty unit for every 28 days or part thereof that a document is overdue, up to a maximum of five units. A penalty unit is $364 for infringements on or after 1 July 2026, so the base maximum sits at $1,820 — and that base is doubled for a medium withholder and multiplied by five for a large one.

Here is the sting. As a general rule the ATO says it won't issue a failure to lodge penalty notice for a late return or activity statement where the lodgment produces a refund or a nil result. That general rule carries an express carve-out: it doesn't apply where the unlodged document is a third-party data report, such as a taxable payments annual report. The instinct that says nothing is owed, so nothing much can happen is exactly the instinct this form is built to defeat.

The ATO also isn't quiet about it beforehand. Its published approach is to apply failure to lodge penalties to those who have been issued three non-lodgment letters and still haven't lodged a TPAR from 2025 or earlier years — and in a March 2026 update it put the previous year's TPAR penalties at just over $5 million.

This is general information current as at August 2026, not advice about your business. If contractors were part of how the work got done this year, the sequence between now and 28 August is short: work out the percentage before you assume you're outside it, pull the four fields for each contractor from your records rather than from memory, and if the answer really is no, lodge the non-lodgment advice so the answer is on file instead of in your head. If your books are already in accounting software, the report is usually a short job on top of what's there — and if you're not sure whether a payment belongs in the TPAR, on a payment summary, or nowhere at all, that boundary is what our service for companies, trusts and bookkeeping deals with week to week.