TPAR Changes and Updates for 2025: What’s New?

What Is TPAR and Who Needs to Lodge?

The TPAR applies to businesses and government entities that pay contractors for certain services. These include:

• Building and construction businesses

• Cleaning services

• Courier and road freight services

• Information technology services

• Security, investigation, or surveillance services

If your business operates in one of these areas and pays contractors, you’ll likely need to lodge a TPAR. The main test is whether payments for these services make up a significant part of your total business income—generally 10% or more, or 50% for construction businesses. Sole traders, labour hire firms, and consolidated groups may also have TPAR obligations if they hire contractors for relevant services.

The Move to Digital-Only Lodgement

A key change for 2025 is that the ATO will only accept TPAR lodgements online after 28 August 2025. Paper forms will no longer be processed. This shift is designed to make the process smoother, reduce errors, and help businesses report directly through their accounting software or the ATO website.

Why Accurate Reporting Is Essential

The ATO uses the information from your TPAR reports to match against contractor tax returns and ensure every contractor pays their fair share of tax. This means accurate contractor information—like the contractor’s Australian Business Number (ABN), name, and address—is vital. The ATO also checks that payments made to contractors are correctly reported, including whether GST is included and if the services provided fall under the specific services listed for TPAR.

Understanding the 2025 TPAR Changes

Let’s take a closer look at what’s new for the 2025 financial year and how it affects your business.

Digital Lodgement Is Now Required

From 28 August 2025, you must lodge a TPAR online. Whether you use accounting software or the ATO’s online services, make sure your systems are ready. This change applies to all businesses required to lodge a TPAR, no matter their size or industry.

No New Industries—But Stay Alert

For 2025, there are no new industries added to the TPAR regime. However, the ATO regularly reviews which businesses should report payments. If your business provides services related to those already listed, keep an eye on future updates, as reporting requirements may expand.

Increased Focus on Accurate Contractor Payments

The ATO is paying closer attention to the details in your TPAR, including contractor ABNs, total payments made, and whether contractors are Australian residents or foreign residents. Payments to foreign residents may have different tax obligations, so it’s important to check your records carefully.

Penalties for Non-Compliance

Missing the due date or submitting incorrect TPAR reports can lead to potential penalties. The ATO is actively following up with businesses that don’t meet their reporting obligations, and penalties can add up quickly. To avoid stress and unnecessary costs, make sure your TPAR is accurate and lodged on time.

How to Prepare for TPAR Reporting in 2025

With the new digital-only system and ongoing compliance focus, it’s important to have a clear plan for meeting your TPAR requirements.

Get Your Systems Ready

• Upgrade your accounting software to support TPAR reporting. Most popular platforms now include features to help you report payments easily.

• Make sure your business or your tax agent can access the ATO’s online services.

• Check that your contractor information is complete and up to date, including ABNs and payment details.

Keep Accurate Records All Year

• Record all contractor payments, including the total paid, GST included, and the services provided.

• Track unpaid invoices and payments made to contractors throughout the financial year.

• Regularly review your records to ensure compliance with TPAR requirements.

Educate Your Team

• Make sure anyone involved in paying contractors understands what information needs to be collected and reported.

• Assign someone to oversee TPAR compliance and keep track of reporting deadlines.

Review Your TPAR Obligations Each Year

• Check if your business activities have changed and whether you now need to report payments for new services.

• If your business is generally exempt or no longer needs to lodge a TPAR, submit a Non-Lodgement Advice to the ATO to avoid follow-up.

Lodge On Time and Avoid Penalties

• Mark the 28 August due date in your calendar to ensure your TPAR is lodged on time.

• If you’re unsure about your reporting requirements, seek advice from a registered tax professional.

Other Considerations for TPAR in 2025

While the main focus is on digital lodgement and accurate reporting, there are a few other points to keep in mind:

• Only payments for certain services need to be reported, not all payments made by your business.

• Payments to independent contractors, sole traders, and labour hire firms for relevant services are included, but incidental labour or minor part services may be excluded.

• If you’re part of a consolidated group, check if the group’s total income or payments require reporting.

Conclusion

Keeping up with TPAR changes and updates for 2025 doesn’t have to be stressful. By preparing early, updating your systems, and keeping clear records, you can meet your TPAR obligations and avoid potential penalties. Our team is here to help you report payments accurately, lodge a TPAR with confidence, and ensure your business stays compliant with the Australian Taxation Office.

If you’d like support with your TPAR reporting or have questions about your tax obligations, reach out to us today. How will you make TPAR compliance easier for your business this year?