Can You Pay Your ATO Tax Bill by Credit Card? What Changes After 30 June 2027

Paying tax by credit card can give a business some breathing room, but it also creates another repayment commitment. With direct ATO credit card payments scheduled to end after 30 June 2027, businesses that rely on this payment method should review their alternatives before the transition.

• Can you pay an ATO tax bill by credit card?
• What changes to ATO credit card payments after 30 June 2027?
• Why is the ATO changing credit card payments?
• Does the ATO charge a fee for credit card payments?
• Is the ATO credit card fee tax-deductible?
• Is paying tax by credit card a good cash flow strategy?
• Credit card vs debit card vs bank transfer vs payment plan
• Can you earn credit card rewards or points when paying the ATO?
• Can you pay BAS or GST by credit card?
• What happens if your credit limit is lower than the tax bill?
• What if you can’t afford to pay the ATO in full?
• Credit card or ATO payment plan: what should you compare?
• Does an ATO payment plan stop interest from accruing?
• What records should you keep when paying the ATO by credit card?
• How long does an ATO payment take to appear?
• What should businesses do before 30 June 2027?
• ATO tax payment checklist
• When should you get accounting or tax advice?
• FAQs

Can you pay an ATO tax bill by credit card?

Yes. You can still directly pay your tax bill by credit card in Australia until 30 June 2027. Businesses can use the ATO’s available card payment channels to pay relevant tax liabilities, including business tax debts.

The key issue is no longer whether you can pay by card today, but what happens after 30 June 2027.

What changes to ATO credit card payments after 30 June 2027?

Direct credit card payments to the ATO remain available until 30 June 2027. After that date, the ATO intends to stop accepting credit cards.

Businesses that wish to continue paying taxes with a credit card may use third-party payment providers. Other free or low-fee methods, including debit card and bank transfer, will remain available.

Why is the ATO changing credit card payments?

The ATO considered options after rules around card surcharges changed, including asking credit card providers to reduce their fees. However, the government noted that card companies didn’t offer low enough fees to make direct card payments sustainable in the long term.

Temporary funding allows direct credit card payments to continue until 30 June 2027. This extension gives businesses time to prepare and allows for further discussion on support options for taxpayers facing financial hardship.

Does the ATO charge a fee for credit card payments?

No. Currently, card payment fees don’t apply to payments made through its card payment services.

However, paying by credit card can still have costs. Your card issuer may charge interest if you don’t repay the balance in accordance with your card’s terms, and annual or account fees may apply under your card agreement.

After 30 June 2027, taxpayers who continue to use a credit card through a third-party payment provider should check that provider’s fees, charges, and processing timeframes before making a payment.

For the latest payment guidance, see the ATO payment page.

Is the ATO credit card fee tax-deductible?

The ATO has previously stated that a card payment fee may be tax-deductible, depending on the taxpayer’s circumstances. That doesn’t mean every fee is deductible or that private and business tax payments receive identical treatment.

If you face substantial fees or aren’t sure about their tax treatment, a tax accountant can help you navigate the proper deductions available.

Is paying tax by credit card a good cash flow strategy?

There is no universal answer. A credit card can provide short-term payment flexibility and help a business meet an ATO due date, but the benefit depends on how and when the card balance will be repaid.

Potential benefit

Using a credit card may bridge a short gap between a tax payment deadline and incoming business receipts. How useful it is depends on the available credit, the card’s terms, and the business’s ability to repay without creating another cash shortfall.

Potential cost

Depending on the payment channel and card agreement, the business may incur:

• A card or third-party payment fee
• Credit-card interest
• Annual or account fees
• Cash flow pressure when the card balance falls due

Tax payment credit card fees and rewards vary by card, so compare the actual terms to make the decision that’s right for you. Remember that paying the ATO by credit card doesn’t eliminate the debt. It transfers the liability from the ATO to the card issuer.

Credit card vs debit card vs bank transfer vs payment plan

Let’s have a look at how different payment options compare.

Option	Main consideration
Credit card	Convenience and short-term liquidity, but issuer interest and other costs may apply. Check current direct payment and provider fee arrangements.
Debit card	Uses available cash rather than borrowing; the ATO’s current direct card guidance says no card payment fee applies.
BPAY / bank transfer	Pays from available funds without creating new borrowing when funded from a bank account.
ATO payment plan	Spreads ATO debt over time, but a general interest charge may apply.
Third-party credit-card provider	May remain available after June 2027; provider fees, conditions, and processing times should be verified.

Can you earn credit card rewards or points when paying the ATO?

Whether an ATO payment earns points depends on your card issuer’s terms. Some cards award fewer points on government payments, exclude them from rewards, or apply different transaction conditions.

Check the issuer’s terms before assuming an ATO payment earns standard rewards. Any rewards need to be weighed against the payment costs.

Can you pay BAS or GST by credit card?

Yes. If you can pay the liability through the ATO’s card payment service, then you can use any of the currently available methods. Relevant payments can include:

• Business Activity Statement (BAS) liabilities
• Goods and Services Tax (GST)
• PAYG instalments
• Income tax debt

The ATO issues different reference numbers for different tax accounts, including income tax and activity statements. Make sure to use the correct payment reference number for the account being paid.

What happens if your credit limit is lower than the tax bill?

If your available credit doesn’t cover the full amount, consider:

• Making a partial payment using the card
• Paying the balance through another available ATO payment method
• Contacting the ATO about a payment plan if you can’t pay the remainder by the due date

Base the decision on affordability and meeting the liability, not on splitting transactions to maximise rewards or work around card limits.

What if you can’t afford to pay the ATO in full?

Businesses that can’t pay a tax debt on time may be eligible for an ATO payment plan. If your business owes $200,000 or less, you can often explore setting one up through online services, a registered tax or BAS agent, or the automated business service.

A payment plan is different from paying by credit card:

• The debt remains with the ATO.
• You repay it over an agreed period.
• The general interest charge (GIC) continues to accrue on the unpaid amount.

Before proposing instalments, work out what the business can afford after allowing for operating expenses and future tax obligations. A repayment schedule needs to address the existing debt without leaving the business unable to pay its next BAS or income tax bill.

Credit card or ATO payment plan: what should you compare?

Neither option is universally cheaper. When deciding if it’s better to use your credit card or sign up for an ATO payment plan, consider the following:

Consider	Credit card	ATO payment plan
Debt sits with	Card issuer, once the ATO payment is completed	ATO
Upfront ATO payment	The amount charged is paid as a transaction, subject to processing	Debt is repaid over time; an upfront amount may be required
Card fee	Check current arrangements; third-party fees may apply	Not applicable in the same way; payment-method costs should still be checked
Interest	Card interest may apply	GIC generally applies to unpaid amounts
Credit limit	Relevant	No card credit limit applies, but eligibility and affordability matter
Cash-flow timing	Depends on the card cycle and repayment terms	Follows an agreed instalment schedule

Does an ATO payment plan stop interest from accruing?

No, generally not. GIC continues to accrue on unpaid amounts under a payment plan, so an agreed instalment arrangement shouldn’t be treated as interest-free.

GIC is calculated on a daily compounding basis, and its rate is reviewed quarterly. As such, you should include that cost when comparing a payment plan to credit card borrowing.

What records should you keep when paying the ATO by credit card?

Keep a clear record of both the tax payment and any associated costs:

• ATO payment receipt
• Payment reference number
• Credit card statement
• Details of any card or provider payment fee
• Date paid
• Tax liability and the account the payment relates to
• Accounting entry for any fee
• Any third-party payment provider invoice
• Payment plan agreement and repayment records, where applicable

The ATO provides a receipt number for payments made through its card services, and the payment appears on the card statement as “ATO payment”. If a provider or issuer charges a separate fee, retain the corresponding record as well.

How long does an ATO payment take to appear?

Payments can take up to four business days to be received and appear on the ATO account. Using the correct payment reference number helps ensure the money is credited to the right account.

Don’t leave payment until the last minute, as processing time could affect whether it reaches the ATO by the due date. Check the timeframe for your chosen method, particularly when using a third-party provider.

What should businesses do before 30 June 2027?

Businesses that use credit cards for tax payments should:

• Confirm whether they currently rely on direct ATO credit-card payments.
• Review how frequently tax obligations are funded through credit.
• Compare current card interest, account fees, and any payment provider fees.
• Review alternative ATO payment methods.
• Consider setting aside tax money more regularly.
• Review payment plan options before a payment crisis occurs.
• Revisit the ATO’s payment guidance closer to June 2027.
• Check third-party provider costs and processing times before switching.

The ATO specifically encourages taxpayers considering third-party providers to review the relevant fees, charges, and processing timeframes.

ATO tax payment checklist

• Confirm the liability and due date.
• Check available ATO payment methods.
• Confirm the correct payment reference number.
• Check current card payment and provider fee arrangements.
• Calculate potential card interest.
• Compare debit card, BPAY, or bank transfer.
• Compare an ATO payment plan if cash flow is tight.
• Allow sufficient processing time.
• Keep the payment receipt.
• Record any card or provider fee separately.
• Don’t rely on future credit to meet every tax obligation.
• Review the June 2027 change before the transition deadline.

When should you get accounting or tax advice?

Seek accounting or tax support where:

• You’re regularly funding tax liabilities with credit cards.
• The business can’t meet BAS or income tax obligations on time.
• Multiple tax debts are outstanding.
• GIC is accumulating.
• The business is considering a payment plan.
• Card costs are materially affecting cash flow.
• The business needs to change how it sets aside GST, PAYG or income tax.

Business tax compliance can be overwhelming if you’re facing tight cash flow as well. However, the longer you delay payment, the more you’ll be paying in interest, late penalties, and fees.

An experienced tax planner can help you effectively arrange your business finances. Get in touch with Lawpath’s experienced team today.

FAQs

Can you pay the ATO by credit card?

Yes. The ATO will continue to accept direct credit card payments through its available payment channels until 30 June 2027.

When will the ATO stop accepting credit cards directly?

The ATO intends to stop accepting direct credit card payments after 30 June 2027. Businesses should check the guidance again before the deadline for any updates to arrangements.

Can you pay BAS by credit card?

Yes, if the BAS liability is payable through the ATO’s card payment service. Be sure to use the payment reference number for the relevant activity statement account.

Does the ATO charge a credit card fee?

The ATO’s current guidance says card payment fees don’t apply to its direct card payments. Third-party providers and card issuers may impose their own charges, so check the terms before paying.

Is the ATO credit card fee tax-deductible?

Card payment fees may be deductible depending on your circumstances. Check the treatment with your accountant.

Can you pay an ATO tax debt with a debit card?

Yes. The ATO accepts debit card payments through its available card payment channels. Debit card options are expected to remain available after June 2027.

Can you pay the ATO through BPAY?

Yes. BPAY is an available payment method for ATO.

What happens to credit card payments after 30 June 2027?

Direct ATO credit card acceptance is scheduled to end after that date. Taxpayers wishing to continue using credit cards may be able to pay through third-party providers instead.

Can you use a third-party provider to pay the ATO by credit card?

Yes, third-party payment services can allow you to pay an ATO payment by credit card, and the ATO says this option may continue after June 2027.

Is an ATO payment plan better than using a credit card?

Neither option is automatically better. Compare card interest and fees with the payment plan’s GIC, repayment schedule, and effect on working capital.

Does interest apply to an ATO payment plan?

Generally, yes. GIC continues to accrue on unpaid amounts under an ATO payment plan, so agreeing to instalments doesn’t ordinarily stop the accrual of interest.

How long does an ATO payment take to appear?

Payments can take up to four business days to be received and appear on the account. Allow sufficient processing time and use the correct payment reference number.

Sources

• https://www.ato.gov.au/media-centre/ato-extends-transition-period-for-taxpayers-using-credit-cards-until-30-june-2027
• https://www.ato.gov.au/individuals-and-families/paying-the-ato/how-to-pay/pay-with-online-services