The ATO has extended the deadline for credit card tax payments until 30 June 2027, giving Australian businesses more time to prepare for the removal of direct credit card payments. However, from 1 July 2027, taxpayers will need to use an alternative payment method when paying the Australian Taxation Office (ATO) directly.
If your business uses a credit card to pay tax bills, manage cash flow or meet ATO payment plan instalments, now is the time to review your arrangements and plan ahead.
Why Is the ATO Removing Credit Card Payments?
In early October 2026, the ATO announced that it would stop accepting direct credit card payments after 30 November 2026.
The decision followed the Reserve Bank of Australia’s (RBA) ban on card surcharges, which commenced on 1 October 2026. Without being able to pass these costs on to taxpayers, the ATO estimated it would incur almost $200 million in additional annual costs.
The announcement raised concerns among small businesses that rely on credit cards to manage short-term cash flow and spread the timing of tax payments.
In response, the Australian Government provided transitional funding, allowing the ATO to continue accepting credit card payments until 30 June 2027.
While this extension provides businesses with additional time to adjust, it does not mean credit card payments will remain available indefinitely.
When Will the ATO Stop Accepting Credit Card Payments?
The revised deadline for direct ATO credit card payments is 30 June 2027.
Here is what you need to know:
- 1 October 2026: The Reserve Bank’s card surcharge ban commenced.
- Early October 2026: The ATO announced plans to discontinue direct credit card payments.
- 30 November 2026: Original proposed deadline for ending credit card payments.
- 30 June 2027: Extended final date for direct ATO credit card payments.
- 1 July 2027: Direct credit card payments will no longer be available.
Businesses that currently use credit cards to pay income tax, GST, PAYG instalments or other ATO liabilities should prepare to transition to another payment method before the deadline.
What Payment Methods Can You Use Instead of a Credit Card?
From 1 July 2027, taxpayers will need to use another method to pay the ATO directly.
Available alternatives include:
- Debit card: Pay directly from your bank account using an eligible debit card.
- BPAY: Make tax payments through your participating bank or financial institution.
- Bank transfer: Transfer funds directly to the ATO using the relevant payment details.
- Direct debit: Arrange automatic payments from your nominated bank account.
- Australia Post: Make payments at participating Australia Post outlets, where available.
- International money transfer: Use an applicable international payment service if you are paying from overseas.
Some third-party payment providers may continue to offer credit card payment facilities for tax liabilities. However, these providers may charge additional transaction or processing fees, and payments may take longer to reach the ATO.
Before using a third-party provider, check the total fees, processing times, payment conditions and whether the service is suitable for your tax obligations.
How Will the ATO Credit Card Changes Affect Small Businesses?
The removal of direct credit card payments will not affect all taxpayers equally.
During the 2024–25 financial year, approximately 5% of small businesses and just over 2% of individuals used credit cards to pay the ATO.
For businesses that rely on credit cards, the change could have a noticeable impact on cash-flow management.
Credit cards can provide an additional interest-free period between making a tax payment and settling the credit card balance. This can be particularly useful when business income and expenses do not fall due at the same time.
Without this option, businesses may need to reconsider how they manage upcoming tax liabilities, particularly during periods of tight cash flow.
The key is to establish a payment strategy that allows you to meet your ATO obligations without placing unnecessary pressure on your working capital.
What Happens to Existing ATO Payment Plans Linked to Credit Cards?
If you have an existing ATO payment plan that uses a credit card for regular instalments, you should review your arrangements before the transition deadline.
The ATO has been contacting affected taxpayers about the changes. However, you should not assume your existing payment arrangements will continue automatically.
Make sure you:
- Confirm how future payment plan instalments will be collected.
- Check whether your current credit card details need to be replaced.
- Arrange an alternative payment method with the ATO.
- Allow sufficient time for new payment arrangements to take effect.
- Monitor your account to ensure future instalments are processed successfully.
Missing an instalment or failing to meet an agreed payment date could result in additional interest or other consequences.
How Should Your Business Prepare for the ATO Credit Card Payment Changes?
Although the extended deadline is 30 June 2027, it is worth reviewing your payment arrangements well in advance.
Here are five practical steps to help your business prepare.
1. Review Your Current ATO Payment Arrangements
Identify whether you use a credit card for one-off tax payments, regular tax instalments or an existing ATO payment plan.
Understanding how frequently you rely on credit cards will help you determine what changes are required.
2. Choose an Alternative ATO Payment Method
Compare the available payment options and consider which ones best suit your business.
For example, BPAY and bank transfers may provide a straightforward way to pay tax liabilities, while direct debit may be more convenient for businesses with regular payment commitments.
Consider transaction fees, processing times and when funds are available in your business bank account.
3. Update Recurring Tax Payments Early
If you have recurring payments or an existing ATO payment plan, arrange an alternative payment method before 30 June 2027.
Do not wait until the final days to make changes. Allow enough time to update your details and confirm that your payments are being processed correctly.
4. Reassess Your Business Cash Flow
If your business relies on the interest-free period offered by credit cards to manage tax payments, consider how removing this option will affect your cash flow.
You may need to:
- Set aside funds for upcoming tax liabilities earlier.
- Establish a separate tax savings account.
- Review your cash-flow forecasts.
- Adjust your budgeting for quarterly and annual tax obligations.
- Build a sufficient cash reserve to cover future tax payments.
Planning ahead can help reduce the risk of cash-flow shortages when tax payments become due.
5. Speak With Your Accountant or Business Adviser
If your business regularly relies on credit cards to pay the ATO, it may be worth reviewing your broader cashflow and tax payment strategy.
An accountant or business adviser can help you assess your current arrangements, forecast upcoming liabilities and identify practical ways to manage tax payments under the new system.
Frequently Asked Questions About the ATO Credit Card Payment Changes
When will the ATO stop accepting credit card payments?
The ATO is expected to stop accepting direct credit card payments from 1 July 2027. The extended transition period allows credit card payments until 30 June 2027.
Why is the ATO removing credit card payments?
The ATO’s decision follows the Reserve Bank’s ban on card surcharges from 1 October 2026. Without being able to recover credit card processing fees from taxpayers, the ATO estimated it would face almost $200 million in additional annual costs.
Can I still pay my tax bill using a credit card after 30 June 2027?
You will no longer be able to pay the ATO directly using a credit card. However, some third-party payment providers may continue to offer credit card payment services, potentially with additional fees and longer processing times.
What are the alternatives to paying the ATO by credit card?
Alternative payment methods include debit card, BPAY, bank transfer, direct debit and eligible Australia Post payment services. International money transfer services may also be available for applicable payments.
Will my existing ATO credit card payment plan continue?
You should review your existing payment plan and confirm how future instalments will be processed. If your payment plan is linked to a credit card, contact the ATO to arrange an alternative payment method before the transition deadline.
How will the changes affect small businesses?
Businesses that rely on credit cards to manage tax payments may need to adjust their cash-flow planning. Without the additional time provided by a credit card’s interest-free period, businesses may need to set aside funds earlier or adopt a different payment strategy.
Need Help?
If your business currently relies on credit cards to pay ATO tax liabilities, the upcoming changes could affect your cash flow and tax payment arrangements. Pitt Martin Group’s experienced Sydney tax accountants can help you review alternative payment methods, manage existing ATO payment plans, forecast upcoming income tax, GST and PAYG obligations, and develop a practical tax payment strategy. Contact Pitt Martin Group for professional tax and business advisory assistance to help your business prepare for the transition before 1 July 2027.
Pitt Martin Group is a firm of Chartered Accountants, providing services including taxation, accounting, business consulting, self-managed superannuation funds, auditing and mortgage & finance. We spend hundreds of hours each year on training and researching new tax laws to ensure our clients can maximize legitimate tax benefit. Our contact information are phone +61292213345 or email info@pittmartingroup.com.au. Pitt Martin Group, Sydney tax accountants, is located in the convenient transportation hub of Sydney’s central business district. Our honours include the 2018 CPA NSW President’s Award for Excellence, the 2020 Australian Small Business Champion Award Finalist, the 2021 Australia’s well-known media ‘Accountants Daily’ the Accounting Firm of the Year Award Finalist and the 2022 Start-up Firm of the Year Award Finalist, and the 2023 Hong Kong-Australia Business Association Business Award Finalist.
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This content is for reference only and does not constitute advice on any individual or group’s specific situation. Any individual or group should take action only after consulting with professionals. Due to the timeliness of tax laws, we have endeavoured to provide timely and accurate information at the time of publication, but cannot guarantee that the content stated will remain applicable in the future. Please indicate the source when forwarding this content.
By Alex Cramery @ Pitt Martin Tax
