TITLE: ATO Credit Card Ban Delayed to 2027, Payday Super Guidance and $1,000 Standard Deduction Update
Australian businesses have received more time to use credit cards for ATO tax payments. At the same time, new Payday Super guidance clarifies what may happen after a natural disaster or major technology outage. Today is also the final day to comment on the proposed $1,000 standard deduction for work-related expenses.
This update covers the main compliance actions for businesses and international groups operating in Australia, from Sydney and Melbourne to Brisbane, Perth and Adelaide.
ATO Credit Card Payment Ban Delayed Until June 2027
The federal government has stepped in to delay the ATO’s planned withdrawal of direct credit card payments for tax bills.
Treasurer Jim Chalmers announced on Friday 9 October that the government will provide additional funding so the ATO can continue accepting credit card payments until at least 30 June 2027.
The original plan was for direct credit card payments to stop from 1 December 2026. The extension gives the ATO more time to consult with small businesses and consider a workable long-term arrangement.
You can read the latest reporting from ABC News and the SBS News explainer.
What caused the delay?
The change follows the Reserve Bank’s ban on credit card surcharges for EFTPOS, Visa and Mastercard transactions from 1 October 2026.
The ATO previously said that continuing to absorb card processing costs could cost approximately $200 million each year. Around 2.3% of tax payments were made by credit card in 2024–25, while approximately 5% of small businesses used a credit card to pay tax.
Although the proportion is relatively small, business groups argued that the affected businesses often use cards to manage the timing of tax payments and working capital.
The government will finalise the cost of the extension in the mid-year budget update, known as MYEFO, expected in December.
Keep alternative payment methods ready
The extension is temporary. Do not build your payment process around credit card access continuing indefinitely.
Review your business payment options now:
- BPAY for eligible ATO liabilities.
- Debit card payments through available ATO channels.
- Bank transfer from your business account.
- Direct debit where suitable.
- Third-party payment providers that accept credit cards and pay the ATO on your behalf.
The ATO’s payment information explains the available methods and processing requirements.
If you use a third-party provider after 30 June 2027, check its fees, processing times, payment limits and legitimacy. Keep the payment confirmation and match it against the correct ATO account.
Do not delay payment while waiting for a preferred method to become available. General interest charges can continue to accrue on overdue amounts. ATO interest incurred from 1 July 2025 is also no longer tax deductible.
Payday Super Guidance Extends the Contingency Window
The ATO has finalised PS LA 2026/2, which guides ATO staff on when the Commissioner may make an exceptional circumstances determination for Payday Super.
The guidance applies from 1 July 2026 and was clarified after consultation feedback.
Payday Super requires employers to pay superannuation at the same time as salary and wages. In general, an eligible contribution must reach the employee’s super fund within seven business days of payday.
That timing may be difficult to meet after a major event. Examples could include:
- A natural disaster affecting payroll or banking infrastructure.
- A widespread technology outage.
- A significant systems failure affecting contribution processing.
- Another event covered by an exceptional circumstances determination.
Understand the 20-business-day rule
Where an exceptional circumstances determination applies, and the relevant qualifying earnings were paid during the specified period, a covered employer may have 20 business days from the qualifying earnings day to make an eligible contribution.
This is not an automatic extension for every payroll delay. The determination must apply to the relevant circumstances and period.
You should therefore avoid treating a general system problem as permission to delay super payments. Continue using your ordinary payroll controls unless the ATO confirms that an exceptional circumstances determination covers your situation.
The final PS LA 2026/2 guidance explains the administrative approach.
Strengthen your payroll evidence
Payday Super also increases the importance of accurate payroll data and timely reporting through Single Touch Payroll.
Review whether your payroll system can:
- Identify qualifying earnings for each pay cycle.
- Calculate the correct superannuation liability.
- Track contribution payment dates.
- Confirm when contributions are received by the employee’s fund.
- Record rejected or returned payments.
- Preserve evidence of system outages or external disruption.
- Report the required payroll and super information through STP.
The ATO’s first-year compliance approach, covering 1 July 2026 to 30 June 2027, separates employers into low, medium and high-risk zones. Employers that pay super promptly and in full are less likely to be prioritised for compliance activity.
Do not wait for a payment failure before checking your controls. A daily or pay-cycle reconciliation will help you identify errors before they become a super guarantee shortfall.
$1,000 Standard Deduction Consultation Closes Today
Public consultation on draft Law Companion Ruling LCR 2026/D5 closes today, Friday 9 October 2026.
The draft ruling explains the ATO’s proposed approach to the new $1,000 standard deduction for work-related expenses, which is intended to apply from the 2026–27 income year.
The measure is not applicable to the 2025–26 tax return.
The ATO’s draft ruling sets out the proposed treatment. The ATO also provides information about the standard deduction for work-related expenses.
Know what the proposed deduction means
Broadly, an eligible Australian tax-resident individual deriving assessable labour income may be able to claim a standard deduction of up to $1,000 without separately substantiating each expense.
The proposed deduction is limited by the individual’s eligible assessable labour income. Employees with genuine substantiated work-related expenses may continue to claim those expenses, but the interaction with the standard deduction must be considered.
This proposed cha
