If you run a building or construction business and you pay contractors, you almost certainly must lodge a Taxable Payments Annual Report (TPAR) each year — and it is not just admin. It is the ATO's net for catching contractors who under-report. Here is who lodges, the 50% test, what to record, and why getting an ABN up front matters.
Who must lodge — the 50% construction test
You must lodge a TPAR if you have an ABN, you pay contractors for building and construction services (including renovations, repairs and maintenance), and you are primarily in building and construction. The ATO treats you as "primarily" if any of these is true:
- this financial year, 50% or more of your income is from building and construction services, OR
- this financial year, 50% or more of your business activity is building and construction, OR
- last financial year, 50% or more of your income was from building and construction.
Most other TPAR industries (cleaning, couriers, IT, security) use a 10% threshold — construction is the exception at 50%.
What to record, per contractor
- Name, ABN, and address
- Total gross paid for the year — including GST and any cash payments
- The GST component (where the contractor is registered and charges GST)
The TPAR Contractor Record captures this as you go, so August is a five-minute job.
The deadline
28 August after the 30 June year-end — so 2025-26 payments are reported by 28 August 2026 (unless the ATO defers). Lodge online or through your agent; Xero and MYOB generate a compliant file. Miss it and standard failure-to-lodge penalties apply.
Why it actually matters — it is a tool
TPAR is not box-ticking. The ATO matches your TPAR data against what your contractors declare in their own returns and BAS. Where a contractor's declared income is materially less than the payments reported about them, it triggers letters, reviews and audits. For contractors using myTax, TPAR data pre-fills as "other income." So your report helps keep the whole chain honest — and a subbie who has been sloppy will feel it.
The no-ABN trap
If a contractor does not quote an ABN, you may have to withhold 47% of the payment and send it to the ATO. Get ABNs before you pay anyone.
Common mistakes
- Leaving it to August and chasing ABNs you should have had on day one.
- Missing cash-paid contractors — cash payments still count.
- Assuming you are under the threshold — the test is 50% income OR activity, this year OR last.
- Confusing it with the BAS — it is a separate annual report.
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