Taxable Payments Annual Report (TPAR) for Residential Builders

What it is

The Taxable Payments Annual Report (TPAR) is an annual report to the ATO listing payments your business made to contractors during the financial year. It is part of the taxable payments reporting system (TPRS) and the ATO data matches the figures against the contractor's reported income.

If you run a residential building business in Australia, you almost certainly need to lodge a TPAR. The building and construction industry was the first industry brought under the TPRS in 2012, and the rules have only widened since.

Who must lodge

You must lodge a TPAR if you are a business that:

• Primarily operates in the building and construction industry
• Makes payments to contractors or subcontractors for building and construction services
• Has an Australian Business Number (ABN)

"Primarily operates in building and construction" means any one of:

• 50% or more of your business income in the current financial year is from building and construction services
• 50% or more of your business activity in the current financial year is building and construction services
• 50% or more of your business income in the prior financial year was from building and construction services

A residential builder, kitchen and bathroom company, custom home builder, renovator, or any business doing primary building work falls under this.

Building and construction services

Building and construction services covered by TPAR include:

• Architectural work, including drafting and design
• Bricklaying, blocklaying and stonemasonry
• Carpentry, joinery and shopfitting
• Concreting, including formwork and reinforcement
• Demolition and asbestos removal
• Electrical work
• Plumbing, gas fitting and drainage
• Painting and decorating
• Plastering, rendering and tiling
• Roofing and guttering
• Surveying and engineering
• Earthmoving, excavating and site preparation
• Landscaping (when related to a building site)

The ATO lists 42 services in TR 2018/D2. The list is wide. Use it as a starting point not the final word.

What you report

For each contractor paid during the financial year, you report:

• ABN (and check it on ABN Lookup)
• Name (business name or individual)
• Address
• Total amount paid for the year (GST inclusive)
• Total GST included in the payment
• Tax withheld where no ABN was quoted

You do not report:

• Payments to employees (those go on STP)
• Payments where the contractor's invoice is for materials only with no labour component
• Payments to incorporated subcontractors are still reportable - incorporation does not exempt them
• Payments for goods only where no service is provided
• PAYG withholding payments where no ABN was quoted that you have already separately reported through PAYG

Due date and lodgment

The TPAR is due by 28 August each year for the financial year ending 30 June. So for the 2025-26 financial year, the TPAR is due by 28 August 2026.

From 28 August 2025 onward the ATO no longer accepts paper TPAR lodgments. Lodgment must be done online through:

• Standard Business Reporting (SBR) enabled software (accounting software like Xero, MYOB, QuickBooks)
• ATO Online Services for Business
• Through your registered tax or BAS agent

Most accounting software produces the TPAR from your supplier transactions if you flag contractor payments correctly during the year.

Penalties for failing to lodge

The ATO has been clear it will enforce TPAR. Penalties for late or non lodgment are calculated under the failure to lodge regime in the Taxation Administration Act 1953. For a small entity, the base penalty unit is multiplied by the number of 28 day periods overdue, capped at five units. The penalty unit is indexed annually.

Beyond direct penalties, missing TPAR data triggers ATO review activity. Contractors with significant unreported income get follow up letters. If you are the building principal and your TPAR is missing, expect questions about why your subcontractor payments are not appearing in the system.

Records you need during the year

Make TPAR easy by capturing supplier data when you set up new subcontractors:

• Verify their ABN at abr.business.gov.au
• Save their address (PO Box is not acceptable, you need a street address)
• Tag them in your accounting software as a contractor (most software has a TPAR flag)
• Record total paid (including GST) separately from materials only invoices

If you pay through your bookkeeper or accountant, give them a list of TPAR contractors before 30 June so the report can be drafted in July.

Practical checklist for builders

By 30 June:

• Review your supplier list and identify each subcontractor
• Confirm ABN status for each (cancelled ABNs explain why a contractor disappeared)
• Reconcile total payments against bank statements

By 28 August:

• Generate the TPAR from accounting software
• Cross check three or four large suppliers manually against your records
• Lodge online and save the receipt

Special cases

If you make no reportable payments in a year (rare for residential builders), you still need to lodge a "TPAR non lodgment advice" so the ATO knows you have not forgotten.

Quotes paid as deposits but not yet drawn down are not reportable until the payment is actually made. Cash payments to subcontractors are reportable on the same basis as any other payment if the contractor has an ABN.

When to get advice

The 50% threshold catches builders who diversify into property development or maintenance services. If your mix is shifting, talk to your accountant about whether TPAR still applies. Construction holding companies that subcontract work to a related building company can both have TPAR obligations.