TITLE: ATO Compliance Changes October 2026: Credit Card Payments, PAYG Variations, Contractor Pre-Fill and Key Deadlines
Change your ATO payment method before 30 November
The ATO will stop accepting credit card payments after 30 November 2026. The change follows the national card surcharge ban that began on 1 October.
The ban covers surcharges on:
- EFTPOS cards.
- Visa and Mastercard cards.
- Credit cards.
- Debit cards.
- Prepaid cards.
If you have an ATO payment plan or direct debit arrangement linked to a credit card, you must update the payment method before the next instalment due after 30 November. The ATO is writing directly to affected taxpayers.
Available alternatives include:
- Direct debit from a bank account.
- Debit card payments.
- BPAY.
- Other approved electronic payment methods.
Update your arrangement early. A failed payment could place your payment plan into arrears and create additional interest or collection issues.
The ATO says only around 2.3% of tax payments were made by credit card in 2024–25. However, the change may still affect businesses that use credit cards to manage short-term tax cash flow.
The Australian Chamber of Commerce and Industry has criticised the decision. Treasurer Jim Chalmers has defended the broader surcharge ban, stating that it saves consumers approximately $1.6 billion each year.
The surcharge rules do not prevent legitimate separate charges such as booking fees, service fees, delivery charges or weekend and public holiday hospitality surcharges. A genuine fee for a separate service must not be disguised as a card payment surcharge.
Read the ATO’s credit card payment announcement and payment plan guidance.
Support every nil PAYG variation with evidence
The ATO is auditing taxpayers who vary PAYG instalments down to nil or significantly reduce them.
A nil variation can be valid. You may have a genuine basis if your business has ceased trading, suffered a substantial and documented loss, or expects no taxable income for the year.
However, you must be able to substantiate your estimate. Prepare and retain:
- Current management accounts.
- Revenue forecasts.
- Expense budgets.
- Cash-flow projections.
- Evidence of cancelled contracts or reduced trading.
- Records of carried-forward losses.
- Working papers showing how you calculated expected taxable income.
The risk arises when a taxpayer varies instalments to nil but later reports a material tax liability. The ATO is particularly interested in repeated or aggressive variations that defer tax payments and create a cash-flow benefit.
If your varied instalments are less than 85% of your final tax liability or the applicable benchmark, general interest charge may apply. Penalties may also arise where you did not take reasonable care or made a false or misleading statement.
Do not vary PAYG instalments simply because cash flow is tight. Review your forecast first. If income improves during the year, update the variation promptly. This approach gives you a defensible compliance record and reduces the risk of interest and penalties.
Follow the ATO’s guidance on varying PAYG instalments.
Check contractor income before lodging 2025–26 returns
The ATO is pre-filling contractor income reported through the Taxable Payments Annual Report in 2025–26 tax returns.
Around 700,000 sole traders and individual contractors are expected to have contractor income pre-filled. The data covers approximately $21 billion in reported payments.
The development affects contractors and businesses operating in industries such as:
- Building and construction.
- Cleaning.
- Courier and road freight.
- Information technology.
- Security and investigation services.
- Other businesses required to report contractor payments.
If you receive pre-filled income, compare it with your own accounting records. Check that:
- The payment amount is correct.
- GST has been excluded where required.
- The income belongs to the correct financial year.
- Duplicate payments have not been recorded.
- Any income missing from the pre-fill is added manually.
Pre-filled information does not remove your responsibility to report all assessable income. The ATO may now identify omissions or understatements more easily because payer data is matched directly to the contractor’s return.
Businesses paying contractors must also ensure their TPAR is accurate and lodged by the relevant deadline. Your reporting can now directly affect what appears in a contractor’s individual return.
Review the ATO’s Taxable Payments Annual Report guidance.
Prepare for the October compliance deadlines
October contains several important dates for Australian taxpayers and businesses.
21 October 2026: annual PAYG instalments
Annual PAYG instalment notices for the 2025–26 year are due on 21 October. If you use the rate method or vary the instalment, the relevant notice must also be lodged by this date.
Pay the amount shown by the ATO on time if no variation is required. This avoids unnecessary interest and follow-up activity.
28 October 2026: September quarterly BAS
The September quarter BAS and relevant quarterly PAYG or GST instalment notices are generally due on 28 October.
Complete your bookkeeping before the deadline. Reconcile sales, purchases, GST, payroll and marketplace settlements first. This reduces the chance of lodging an incorrect BAS and needing a later amendment.
31 October 2026: tax agent and reporting deadlines
For tax agents, 31 October is a hard deadline to lodge overdue prior-year returns and add new clients to secure relevant lodgment program due dates. The deadline is not extended simply because 31 October falls on a weekend.
For individual self-lodgers, the position is different. As 31 October 2026 falls on a Saturday, the 2025–26 individual tax return can generally be lodged by Monday 2 November 2026 without a late-lodgment penalty.
Certain in-scope multinational groups may also have their global and domestic minimum tax reporting due on 31 October. This applies to specific Pillar Two groups, including those with a first relevant fiscal year ending 30 April 2025. Check the ATO guidance for the full requirements.
