Key takeaways
- A Taxable Payments Annual Report (TPAR) must be lodged by 28 August each year, covering payments made in the financial year to 30 June.
- A business must lodge if it is primarily in building and construction services, pays contractors or subcontractors for building and construction services, and has an ABN.
- “Primarily” means 50% or more of business income or activity from building and construction services in the current year, or 50% or more of income in the previous year.
- Report the total paid to each contractor, including labour and materials on the same invoice. Leave out materials-only purchases, employees’ wages, labour hire workers and private or domestic payments.
- The ATO uses TPAR data to match what contractors report as income, so accurate contractor details matter as much as the amounts.
Every August, building businesses around the country face a deadline that many only think about once a year: the Taxable Payments Annual Report, or TPAR. It is due by 28 August, and it tells the Australian Taxation Office how much each business paid its contractors for building and construction services in the financial year just ended.
For businesses with good bookkeeping, it is a report the accounting software produces in minutes. For businesses that have not coded payments properly, or have incomplete contractor details, it can be a scramble. This guide covers who must lodge, what to report, what to leave out, and how to get it right.
What the TPAR is for
The taxable payments reporting system was introduced because the ATO found that some contractors in certain industries, building and construction among them, were not declaring all their income. By requiring the businesses that pay contractors to report those payments, the ATO can match the payments against what contractors declare in their own tax returns.
Building and construction was one of the first industries covered, and it remains one of the most closely watched. Cleaning, courier and road freight, information technology, and security, investigation and surveillance services are also covered.
Who must lodge
According to the ATO, if you run a business primarily in the building and construction industry, you must lodge a TPAR if you make payments to contractors or subcontractors for building and construction services, and you have an ABN.
You are considered to be primarily in building and construction services if any of these apply:
- in the current financial year, 50% or more of your business income is earned from providing building and construction services;
- in the current financial year, 50% or more of your business activity relates to building and construction services; or
- in the financial year immediately before, 50% or more of your business income was earned from providing building and construction services.
That last test catches businesses whose mix of work changed. A business that was mainly building last year but mainly something else this year must still lodge for this year.
Do I need to lodge a TPAR?
- 1Do you have an ABN?The requirement applies to businesses with an ABN.
- 2Are you primarily in building and construction?50% or more of income or activity from building and construction services this year, or 50% or more of income last year.
- 3Did you pay contractors for building and construction services?Subcontractors who are sole traders, companies, partnerships or trusts.
- 4All three yes?Lodge a TPAR by 28 August for payments made in the financial year to 30 June.
Source: ATO, building and construction services and TPAR.
The ATO’s examples make the boundaries clearer. A builder earning all its income from building work must lodge. A separate entity set up to manage construction for a developer must lodge, because its activity is building and construction. A hardware retailer that occasionally arranges installation does not have to report those installation payments, because it is primarily a retailer. But a separate installation business set up by that retailer would have to.
What counts as building and construction services
The ATO’s definition is broad. It covers alteration, assembly, construction, demolition, design, erection, excavation, finishing, improvement, installation, maintenance (but not maintenance of equipment and tools), management and organisation of building and construction services, modification, removal, repair and site preparation, when done on or in relation to a building, structure, works, surface or sub-surface.
Building and construction services include, for example
- Bricklaying, blocklaying, concreting and formwork.
- Carpentry, erection of frames, roofing, fencing and scaffolding.
- Electrical work, plumbing, drainage and gasfitting.
- Plastering, painting, decorating, tiling and flooring.
- Cabinet making and joinery for installation on site.
- Excavation, earthworks, demolition and site preparation.
- Architectural drafting, design, engineering and construction management.
- Equipment hire with an operator (without an operator it is hire of goods).
Source: ATO list of building and construction services (not exhaustive).
Note that design and management are included. Payments to architects, drafters, engineers and construction managers engaged as contractors are building and construction services for TPAR purposes.
What to report
For each contractor paid for building and construction services, the TPAR reports the contractor’s details, including their ABN, name and address, and the total amount paid to them in the financial year, including GST, along with the GST component. Only payments actually made by 30 June count; invoices received but unpaid at 30 June are reported in the year they are paid.
If a contractor’s invoice includes both labour and materials, report the total amount. Many builders get this wrong by trying to strip out the materials. The ATO’s guidance is clear: where an invoice includes both, report the total.
What to leave out
What goes in the TPAR, and what stays out
| Payment | Report it? |
|---|---|
| Subcontractor invoice for labour only | Yes |
| Subcontractor invoice for labour and materials | Yes, the total amount |
| Materials only from a supplier | No |
| Labour that is incidental to a supply of materials | No |
| Wages to employees (PAYG withholding) | No; reported through STP |
| Workers through a labour hire firm | No |
| Invoices unpaid at 30 June | No; only payments made by 30 June |
| Payments for your own private home | No; private and domestic |
Source: ATO, payments businesses need to report in their TPAR.
A few exclusions deserve a closer look.
- Materials only. Payments to a supplier for materials alone are not reported.
- Incidental labour. Where labour is incidental to a supply of materials, such as a supplier showing you how to install one item, the labour is excluded.
- Employees. Wages are reported through Single Touch Payroll, not the TPAR.
- Labour hire. Workers engaged through a labour hire or on-hire arrangement are not reported.
- Private and domestic payments. A builder paying a plumber to fix their own home, in a private capacity, does not report that payment.
- Contractors who do not quote an ABN. Where an ABN is not provided, you may need to withhold an amount from the payment under the PAYG withholding rules, and report the amount withheld in either the TPAR or the relevant PAYG annual report, not both.
How to lodge
Most businesses lodge the TPAR through their accounting software, which can generate the report from coded contractor payments, or through the ATO’s online services for business. Tax agents and BAS agents can also lodge on a business’s behalf. If you use accounting software, the key is making sure contractor payments are coded to the right accounts through the year and that each contractor’s details are complete.
Late or missing lodgment can attract penalties. The ATO can apply failure-to-lodge penalties to businesses that do not lodge a required TPAR on time. If you are going to be late, talk to your tax agent or the ATO before the due date rather than after.
Common mistakes
- Wrong or missing ABNs. The ATO matches payments to contractors by their details. A wrong ABN means a mismatch, and possibly a query to you or the contractor.
- Stripping materials out of combined invoices. Report the total where an invoice covers labour and materials.
- Reporting suppliers. Materials-only suppliers do not belong in the TPAR.
- Reporting employees. Wages go through STP.
- Using invoice dates rather than payment dates. The TPAR is based on payments made in the financial year.
- Forgetting design and management contractors. Drafters, engineers and project managers engaged as contractors are included.
- Assuming someone else lodged it. Confirm with your bookkeeper or tax agent that it has actually been lodged.
A worked example
Consider a residential builder that earns all its income from new homes and renovations. In the financial year to 30 June, it paid:
- a concreter, a carpenter crew, a bricklayer, a plumber, an electrician, a tiler and a painter, all sole traders or companies with ABNs, for their work on the builder’s jobs;
- a frame and truss manufacturer for supply and delivery of frames;
- a hardware store and a timber yard for materials;
- a drafting business for plans on two jobs;
- a labour hire company for two labourers over a busy month;
- three employees through payroll.
The builder is primarily in building and construction, pays contractors for building and construction services, and has an ABN, so it must lodge a TPAR.
It reports the total paid to the concreter, carpenters, bricklayer, plumber, electrician, tiler and painter, including where their invoices included materials. It reports the drafting business, because design is a building and construction service. It considers the frame and truss manufacturer carefully: if the payments were for supply of materials only, they are not reported; if the manufacturer also installed the frames, the total would be reported. It does not report the hardware store or timber yard, which supplied materials only, the labour hire company, or the employees, whose wages go through Single Touch Payroll.
The builder’s bookkeeper flags the reportable contractors in the accounting software, checks every ABN and address, runs the TPAR report, reviews it against the contractor list, and lodges it well before 28 August.
Records and how long to keep them
The TPAR relies on good records: contractor invoices, payment records and contractor details. Tax records generally need to be kept for five years. Keep invoices showing the contractor’s ABN, the work, the amount and the GST, and records of when each payment was made. If the ATO queries a TPAR, those records are the answer.
Setting up for next year
The easiest TPAR is the one that builds itself through the year. A few habits make that happen:
- Collect each subcontractor’s ABN, legal name and address before their first payment, and check the ABN on the ABN Lookup.
- Set up contractor payments in your accounting software so they are flagged as reportable when the bill is entered.
- Separate materials suppliers from subcontractors in your supplier list.
- Review the TPAR report at the end of each quarter, not only in August, and fix errors while they are fresh.
- Keep invoices and payment records for the required period.
TPAR, contractors and the bigger picture
The TPAR is one of several ways the ATO sees how builders pay the people who work for them. Single Touch Payroll reports employees’ wages, and since 1 July 2026 Payday Super has required super to be paid with each pay run. Together, these reports give the ATO a detailed picture of a building business’s labour costs.
That makes consistency important. A business that treats a long-term, labour-only worker as a contractor, reporting them in the TPAR, while the worker looks like an employee in practice, may attract questions about super and PAYG obligations. The TPAR does not decide whether someone is an employee or a contractor, but the data it produces can prompt those questions.
What contractors should know
If you are a subcontractor, the TPAR means the builders you work for are reporting what they paid you. The ATO will compare those reports with the income you declare. Keep your own records of invoices and payments, and make sure your tax return includes all the income from your building work. If a builder has reported an amount you do not recognise, sort it out with them early.
The bottom line
If your business is primarily in building and construction, pays subcontractors and has an ABN, lodge the TPAR by 28 August. Report the total paid to each contractor for building and construction services, including combined labour and materials invoices, and leave out suppliers, employees, labour hire and private payments. Set up your bookkeeping so next year’s report is a formality.
Questions builders ask
When is the TPAR due?
By 28 August each year, for payments made in the financial year ending 30 June.
Who has to lodge a TPAR in building and construction?
A business with an ABN that is primarily in building and construction services (50% or more of income or activity this year, or 50% or more of income last year) and that pays contractors or subcontractors for building and construction services.
Do I report materials in the TPAR?
Not materials-only purchases. But if a contractor’s invoice includes both labour and materials, report the total amount.
Do I include employees in the TPAR?
No. Payments to employees are reported through Single Touch Payroll, not the TPAR.
Are architects and engineers included in the TPAR?
Yes, where they are engaged as contractors. Design, drafting, engineering and construction management are building and construction services for TPAR purposes.
Sources
- Taxable payments annual report (TPAR) · Australian Taxation Office
- Building and construction services (TPAR) · Australian Taxation Office
- Payments businesses need to report in their TPAR · Australian Taxation Office
Published 12 August 2026. General information for builders, not legal, financial or engineering advice for a specific job. Check current requirements with the relevant regulator or standard before relying on them.
