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  • Courier services

    If you're running a business providing courier services (even if it's only part of the services you provide) you must lodge a Taxable payments annual report (TPAR) for each financial year that you:

    • have an Australian business number (ABN), and
    • make any payments to contractors for courier services they provide on your behalf.

    Payments made to employees are not included in your TPAR.

    If your business provides mixed services, not just courier services, you may need to lodge a TPAR if the payments you receive for courier services make up 10% or more of your total GST turnover.

    You must reassess whether you need to lodge a TPAR each year.

    Your first TPAR for payments made to contractors from 1 July 2018 to 30 June 2019, will be due by 28 August 2019.

    To make it easier to complete your TPAR, you should check the way you currently record information about your payments to contractors.

    On this page:

    See also:

    What are courier services?

    Courier services include activities where items or goods are collected from, and/or delivered to, any place in Australia using a variety of methods, including by car, truck, station wagon, van, ute, motorcycle, motorised scooter, drones, bicycle or other non-powered means of transport, or on foot.

    While the mode of transportation can be useful in identifying a courier activity, it's not the only factor to consider.

    Courier services are usually door-to-door services that are often used for specialty deliveries or for small parcels or packages. Goods commonly transported using courier services include parcels, packages, letters and food.

    If you sell goods and you provide the option of a delivery service, you are supplying a courier service unless the customer doesn't have the option to obtain the goods from you any other way.

    Courier services don't include:

    • delivery of goods your business provides where delivery is the only method your clients or customers have of receiving the goods
    • passenger transport services – for example, buses and taxis
    • freight transport – the transportation of bulk or large quantities of items, goods or commodities via rail, sea, air, or road (usually heavy vehicle trucks or larger vehicles) from one location to another. However, from 1 July 2019, if your business provides both courier and road freight services, you must combine the payments you receive for both these services when working out if you need to lodge a TPAR.

    If an arrangement with your customer involves providing both goods and courier services, you need to determine whether the courier services are:

    • a composite supply of delivering the goods – the delivery is integral, ancillary or incidental to the supply of the goods (and therefore the delivery involved will not constitute 'a courier service'), or
    • a mixed supply of courier services and goods – the delivery is a significant component, or could realistically be made as a separate supply and therefore a 'courier service' (excluding the component for goods).

    Businesses providing mixed services

    If courier services are only part of the services your business provides, you will need to work out what percentage of the payments you receive are for courier services each financial year to determine if you need to lodge a TPAR.

    If the total payments you receive for courier services are:

    • 10% or more of your GST turnover – you must lodge a TPAR
    • less than 10% of your GST turnover – you don't need to lodge a TPAR.

    You can choose to lodge a TPAR even if you think you don't need to. For example, if you're not sure if your payments for courier services will amount to less than 10% of your GST turnover for the financial year you should ensure you are recording the payments you make to contractors anyway. You can still choose to lodge a TPAR even if you're under the 10% threshold.

    To work out if you need to lodge a TPAR, use the following three steps.

    Step 1: Calculate your total payments received for courier services

    Add up all the payments your business received for courier services during the financial year, regardless of whether an employee or a contractor performed those services on your behalf.

    From 1 July 2019, if your business provides both courier and road freight services, you must combine the payments you receive for both these services when working out if you need to lodge a TPAR.

    Don't include payments:

    • you make to contractors for providing these services on your behalf
    • where the courier services provided are merely ancillary or incidental to the goods or other services your business provides.

    Step 2: Calculate your current or projected GST turnover

    If you have been operating your business for:

    • the full financial year – use your current GST turnover for the year
    • less than 12 months of the financial year – you must use your projected GST turnover by working out what your GST turnover will be for the next full financial year.

    Your GST turnover is your gross business income (not your profit) excluding any:

    • GST you included in sales to your customers
    • sales that are not for payment and are not taxable
    • sales not connected with an enterprise you run
    • input-taxed sales you make
    • sales not connected with Australia.

    Step 3: Calculate what percent of your GST turnover is from courier services

    You can calculate this percentage by using the following formula each financial year:

    Total payments received for courier services × 100 divided by Current or projected GST turnover

    If 10% or more of your GST turnover for the financial year is from courier services and you've also made payments to contractors for courier services during the year, you must lodge a TPAR.

    Examples – courier services

    The following examples demonstrate the meaning of providing courier services and whether or not a business providing courier services needs to lodge a TPAR.

    From 1 July 2019, if your business provides both courier and road freight services, you must combine the payments you receive for both of these services in the formula above. If 10% or more of your GST turnover for the financial year is from both courier and road freight services, and you've also made payments to contractors for courier services or road freight services during the year, you must lodge a TPAR.

    Example: A take away restaurant charging for some deliveries

    Wai’s Pizza is a business with an ABN that operates a dine-in and take-away pizza restaurant in Perth. Wai’s Pizza also offers a delivery service for customers’ orders.

    It charges $10 for deliveries of orders under $50 in value. Orders valued at $50 or more are delivered free of charge.

    They use contractors to deliver pizzas to customers.

    In calculating their total payments received for courier services, Wai’s Pizza doesn't include any amount for the delivered orders valued $50 or more because they didn't receive any delivery fees from those orders.

    They have been in business for the full financial year so they can use their current GST turnover for the year.

    Wai’s Pizza works out the following amounts for the 2018–19 financial year:

    • Current GST turnover = $100,000
    • Total payments received for courier services = $5,000 (delivery fees from orders less than $50).

    To work out if they need to lodge a TPAR, Wai's Pizza performs the following calculation:

    $5,000 divided by $100,000 × 100 = 5%

    The $5,000 received in delivery fees represents 5% of their total GST turnover for the 2018–19 financial year, therefore Wai's Pizza don't need to lodge a TPAR.

    Example: A business providing courier and other services

    Quick Smart Tailors Pty Ltd is a business with an ABN that provides clothing repair and alteration services. They also operate a side business that provides express parcel and letter delivery services for businesses.

    Quick Smart Tailors hires couriers to deliver the parcels and letters.

    At the end of the financial year, if the total payments Quick Smart Tailors Pty Ltd received for courier services is 10% or more of its current GST turnover, it will need to report the payments it makes to contractors for courier services in a TPAR.

    Example: A business providing food delivery services to restaurants

    Immediate Food Pty Ltd is a company with an ABN that picks up and delivers food from restaurants to customers. Customers contact the restaurant directly to place orders and the restaurant then uses delivery drivers subcontracted by Immediate Food to undertake deliveries. Immediate Food charges their client restaurants for the services they provide.

    Does Immediate Food Pty Ltd have to report?

    As Immediate Food is delivering the food to customers on behalf of the restaurants, it is supplying a courier service.

    At the end of the financial year, if the total payment they receive for courier services is 10% or more of their current GST turnover, Immediate Food will have to report the total payments they make to each of their subcontractor drivers for courier services in a TPAR.

    Do the restaurants that partner with Immediate Food Pty Ltd have to report?

    The restaurants that partner with Immediate Food are offering their take-away customers a choice of picking up their order from the restaurant or having it delivered to them (via Immediate Food).

    As a result of this, the restaurants are also supplying courier services when they deliver customer orders via Immediate Food.

    At the end of the year, if the total payment they receive for courier services is 10% or more of their current GST turnover, these restaurants will also need to lodge a TPAR to report payments they made to Immediate Food.

    Example: Online florist hiring a contractor to deliver flowers to customers

    Daisy Bouquet Pty Ltd is an online florist with no shopfront and has an ABN.

    Customers purchase flowers from Daisy Bouquet on its website and the flowers are delivered via courier only (with no option for the customer to collect the flowers themselves).

    The courier drivers are contractors engaged by Daisy Bouquet.

    Daisy Bouquet charges customers a small delivery fee as well as the fee for the flowers when they place an order.

    As customers can only obtain the flowers they purchase via delivery, Daisy Bouquet is not supplying a courier service when it sells flowers to customers, even though it charges customers a small fee for delivery. Daisy Bouquet is not required to lodge a TPAR.

    Example: A courier business using employees and contractors to deliver products through different modes of transport

    In A Hurry Pty Ltd has an ABN and supplies courier services mainly within Melbourne.

    In A Hurry needed to send items to customers in Brisbane. To facilitate this, they had their employees pick up the items from their Melbourne warehouse and deliver them to an air freight company, Speedy Air Freight Pty Ltd.

    Speedy Air Freight flew In A Hurry’s items, along with other freight, to Brisbane. In A Hurry engaged local Brisbane courier contractors to collect the items from Speedy Air Freight and deliver them to the Brisbane customers.

    In A Hurry is required to report the payments it made to the contractors that collected the items from Speedy Air Freight and delivered them to the Brisbane customers in a TPAR.

    In A Hurry does not need to report the payments it made to its employees that sent the items to Speedy Air Freight because they are not contractors. The payments made to its employees are for wages and are reported in In A Hurry’s pay as you go (PAYG) withholding payment summary annual report.

    In A Hurry also doesn't need to report payments it made to Speedy Air Freight because they are supplying an air freight transport service and not a courier service.

    End of example

    Authorised by the Australian Government, Canberra 

    Last modified: 07 Mar 2019QC 56822