TPAR 2026 for the Building & Construction Industry: What Australian Builders and Contractors Must Lodge by 28 August

Jul 24

4 min read

For Australian building and construction businesses, one federal reporting obligation quietly rolls around every winter and catches more operators off guard than it should: the Taxable Payments Annual Report, or TPAR. For the 2025–26 financial year it is due to the ATO by 28 August 2026. If your business pays subcontractors for building and construction services, this report is almost certainly on your list — and the data behind it is only as good as the systems you kept during the year.

This is a practical, plain-English walk-through for builders, civil and EPC contractors and their finance teams: what the TPAR is, who has to lodge under the ATO's 50% test, exactly what you report for each contractor, the key dates, and the mistakes we most often see. It is general information, not tax advice — but it should help you reach 28 August without a scramble.

What the TPAR actually is

The TPAR is an annual report that certain businesses must give the ATO listing the payments they made to contractors and subcontractors during the financial year. The ATO uses it to data-match contractor income against what those contractors declare in their own tax returns. It applies to several industries — building and construction, cleaning, courier and road freight, information technology, and security, investigation or surveillance — but building and construction was the original industry covered and remains the largest.

Who has to lodge: the 50% test

If your business is primarily in building and construction, you need to lodge a TPAR when you make payments to contractors for building and construction services and you have an ABN. The ATO treats you as primarily in the industry if any of the following apply:

50% or more of your business income for the current financial year is from building and construction services; or
50% or more of your business activity relates to building and construction services; or
50% or more of your business income in the previous financial year was from building and construction services.

Businesses that operate mainly in other industries but still pay contractors for building and construction services can be caught under different thresholds, so if you sit in a grey area it is worth confirming your position against the ATO guidance or with your accountant rather than assuming you are exempt.

What counts as ‘building and construction services’

The ATO defines building and construction services very broadly. It covers activities performed on, or in relation to, any part of a building, structure, works, surface or sub-surface — including alteration, assembly, construction, demolition, design, excavation, erection, finishing, installation, maintenance, modification, removal, repair and site preparation, among others.

Two points regularly surprise operators. First, plant or equipment hire counts as a reportable building and construction service when it is supplied with an operator; bare hire without an operator generally does not. Second, the test looks at your business overall — the ATO's own example of a cabinet maker earning 60% of income from cabinet making shows how trade-adjacent work on structures can bring a business into scope even when the label doesn't obviously say ‘builder’.

What you report for each contractor

For every contractor you paid for relevant services during the year, the TPAR captures details you should already hold on file from their invoices:

their ABN;
their name and address;
the gross amount you paid for the financial year, including GST;
the total GST included in those payments; and
any tax withheld where the contractor did not quote an ABN.

You report payments actually made during the year, not amounts merely invoiced or accrued. That distinction matters when a subcontractor's final claim straddles year-end — the payment date, not the progress-claim date, determines the reporting year.

Key dates and how to lodge

The TPAR for the 2025–26 year is due by 28 August 2026, and 28 August is the annual deadline every year. You can lodge through the ATO's online services for business, through SBR-enabled accounting software, or via your registered tax or BAS agent. If you have reported in the past but do not need to lodge this year — because you made no reportable payments or your circumstances changed — you can submit a TPAR non-lodgment advice so the ATO does not chase a return you don't owe.

Late or non-lodgment can attract ATO penalties, and because the report is a data-matching tool, gaps and inconsistencies are exactly what it is designed to surface. Treating it as a genuine year-end deliverable rather than a last-week task is the cheapest insurance available.

The mistakes we see most often

Incomplete contractor records — missing ABNs or addresses discovered on 27 August, when the subbie is hard to reach.
Payments made outside the main accounts-payable process — cash, personal cards or director drawings — that never make it into the report.
Assuming labour-hire, or equipment supplied with an operator, sits outside the definition when it doesn't.
Reporting on an invoiced basis instead of a paid basis.
Leaving reconciliation of the contractor ledger until after year-end, when errors are far more expensive to unwind.

How a proper finance function makes TPAR a non-event

None of the above is difficult in isolation. The difficulty is that TPAR accuracy is a by-product of good bookkeeping discipline maintained all year — clean supplier onboarding, ABN validation at the point of engagement, every subcontractor payment flowing through one system, and a contractor ledger reconciled monthly rather than annually. When that discipline is in place, the TPAR is a report you run, not a project you survive.

If you are tightening up your subcontractor processes, a few related reads: our walk-throughs on RCTI rules for builders paying subcontractors, subcontractor compliance and payment-times reporting, and the broader CPA's guide to construction accounting in Australia. And if you would rather hand the whole finance function — from job-cost reporting to year-end obligations like the TPAR — to a team that does this every day, that is exactly what our outsourced finance office is built for.

The businesses that never worry about TPAR aren't the ones with the best software — they're the ones whose contractor data is clean every month of the year.

This article is general information for Australian businesses and does not take your specific circumstances into account or constitute tax advice. For how the TPAR rules apply to your business, check the ATO's TPAR guidance or speak with a registered tax agent. TechEdge Accounting is a CPA-led outsourced finance office for construction, EPC, solar and renewables businesses across Australia — you can reach us on +61 468 634 973 or at info@techedgeaccounting.com.au.