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  • Work out if you need to lodge a TPAR

    Some businesses and government entities need to report information to us about the payments they make to contractors for services.

    Additionally, government entities at the federal, state and territory levels need to report the total grants paid to people or organisations that have an ABN. Local government entities don't need to report grants.

    This information must be reported to us on the Taxable payments annual report (TPAR) due on 28 August each year. The reporting requirements differ between the services provided.

    The table below shows what to consider when working out if you need to report. This depends on the services you provide. We provide an example for each service to follow.

    Examples: The difference in reporting requirements for businesses who provide a service

    Service

    You need to report if

    Example

    What to report in this example

    Building and construction (B&C)

    Either:

    • 50% or more of business income is from B&C services, or
    • 50% or more of business activity is B&C services.

    A building company's total business income for the year is made up of:

    • 35% from carpentry services
    • 35% from construction project management services
    • 30% from AFL umpiring.

    Throughout the year, the business makes payments to contractors for plumbing, roofing, demolition, carpentry, concreting, architecture work.

    The total payments for B&C services equals 70%.

    Report all payments made to contractors providing any of the B&C services.

    Cleaning

    10% or more of business income is from cleaning services.

    See our three-step guide to work out if you need to lodge for cleaning services.

    A business provides:

    • building maintenance services
    • carpet cleaning services.

    For the financial year their:

    • total business income = $100,000
    • total income received for cleaning services = $12,000
    • They pay contractors to provide the carpet cleaning on their behalf.

    12% of the business income is from cleaning services.

    Report the payments to contractors for the carpet cleaning services.

    Courier or road freight

    10% or more of business income is from courier and road freight services.

    Courier services include delivery.

    See our three-step guide to work out if you need to lodge for couriers and road freight services.

    A pizza shop provides:

    • take-away sales
    • home delivery, $4 charge per order.

    For the financial year:

    • Total business income is $200,000.
    • Delivery charges are $25,000

    They pay contractors to make deliveries.

    12.5% of business income is from courier services.

    Report the payments to contractors for delivery services.

    Information Technology (IT)

    10% or more of business income is from IT services.

    See our three-step guide to work out if you need to lodge for IT services.

    A business provides:

    • network design and implementation
    • supplies and installs network hardware
    • ongoing technical support.

    They pay contractors to provide ongoing technical support.

    For the financial year:

    • total business income = $800,000
    • total income received for IT services = $650,000.

    81% of business income is from IT services (network design and implementation and technical support).

    Report the payments to contractors for IT services.

    Security, investigation or surveillance

    10% or more of business income is from security, investigation or surveillance services

    See our three-step guide to work out if you need to lodge for security, investigation or surveillance services.

    A business provides:

    • security for events
    • after hour monitoring and patrolling for business premises

    They pay contractors for security at events and occasionally for patrolling.

    100% of business income is from security, investigation or surveillance services.

    Report all payments to contractors for security, investigation or surveillance services.

    Government entities

    Federal, state, territory and local government entities, except if an exemption applies to them.

    A government entity pays contractors for the following services:

    • gardening
    • photocopier repair
    • electrical work
    • recruitment agency
    • property management
    • cleaning
    • IT support
    • couriers
    • security.

    Report payments to all contractors for all services.

    In addition, federal, state and territory government entities need to report grants paid to ABN holders.

     

    End of example

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    Last modified: 23 Oct 2020QC 55378