End of Year Bookkeeping for TPAR

Written by: The Institute of Certified Bookkeepers

The TPAR report informs the ATO about payments that are made to contractors for providing services.
Industries required to report TPAR by 28th August 2022 are listed in the below table.

Contractors can include subcontractors, consultants and independent contractors.
They can be operating as sole traders (individuals), companies, partnerships or trusts.

The ATO uses this information to identify contractors who haven’t met their tax obligations.

The Taxable Payments Annual Reporting (TPAR) scheme for contractors applies to the industries as per below:

Affected Industries by Financial Year
From 2013	From 2017	From 2019	From 2020
Building and Construction	Government Grants	Courier Services Cleaning Services	Road Freight IT Services Security Services

What Has to be Reported?

A Taxable Payments Annual Report (TPAR) requires the business to outline:

• the contractor’s name (that appears on the invoice the contractor provided)
• the contractor’s Australian Business Number (ABN)
• the contractor’s address (if known)
• the total amount paid or credited to the contractor over the income year
• the amount of any Goods and Services Tax (GST)

“The payment can be in whole or in part for the supply of these services. This means that payments that are only for the supply of goods and materials or salary and wages for employees are not reportable under the new rule.”

ICB feels that most of this information is already captured in the day-to-day bookkeeping processes in the accounting file. It may just mean that clients/bookkeepers need to be more diligent in capturing ABNs for suppliers and flagging those suppliers or employees (if a voluntary agreement is in place) that are reportable and assigning the payments into a separate account on the chart of accounts.

Who Can Report?

Tax Agents and BAS Agents can advise, prepare, and lodge the Taxable Payments Annual Report (TPAR). Business owners can also prepare and lodge the report. The bookkeeper can assist the owner to prepare the report but may not lodge the report directly.

Reconcile TPAR to Subcontractor’s Expense Account

We recommend comparing the total value of the subcontractor’s expense to the TPAR report.

You may find a small difference which may be a result of

• Goods only invoices
• Voluntary Withholding
• Supplier invoice not paid
• Supplier invoice not coded to subcontractors’ expense

Prepare and Lodge TPAR

The form must be lodged either electronically or via the ATO paper form.

To lodge the Taxable Payments Annual Report (TPAR) using an electronic transfer, you need to create an electronic annual report data file using accounting software.

Note: You cannot lodge the following media forms: spreadsheets, CD ROM, DVD, USB, floppy or zip disk.

Electronic Lodgement Options

1. Business Portal (client uses their own AUSkey)
2. ATO Online Services for Agents using the File Transfer/Lodge File option.

TPAR Lodgement Due Date

TPAR lodgement date is 28 August each year.

Paper Form

If you want to lodge a paper form, you must complete and send the Taxable Payments Annual Report to the ATO.

Note: You must use this form; you cannot create your own form.

TPAR – Nil Report

For the 2022 lodgement year you are required to lodge Nil report if in:

• Businesses providing building and construction services that:
  • Are no longer primarily in the building and construction industry, or
  • Didn’t pay contractors for building and construction services.
• A Government entity that:
  • Is a federal, state or territory government entity, and didn’t make payments to an entity wholly or partly for providing services, and didn’t pay grants to people or organisations that have an ABN, or
  • Is a local government entity, and didn’t make payments to an entity wholly or partly for providing services.
• Businesses providing – Courier Services – Cleaning Services – Road Freight – IT Services – Security Services that:
  • Are no longer primarily in any of these industries, or
  • Didn’t pay contractors for any services as a part of these industries.

Amending a TPAR

If you need to amend a Taxable Payments Annual Report, please contact us to assist you in the process.

Single Touch Payroll – Hot Issues

STP became mandatory reporting on 1 January 2022. Employers should embrace STP-2 as soon as your software allows – There is a General Deferral granted for some software, check with your software provider to check if you are affected.

ATO are beginning a following up of all employers who have not commenced reporting through STP2 (including government departments). 

Closely held employees are also required to report STP2.

For more information, call us on 1300 022 270.