If you use a credit card to pay your ATO tax bills, you now have until 30 June 2027 to continue making direct credit card payments.
The Federal Government confirmed the extension on 9 October 2026, following concerns raised by small businesses and other taxpayers.
The Australian Taxation Office had originally planned to stop accepting direct credit card payments from 1 December 2026.
The revised timetable gives taxpayers more time to consider alternative payment arrangements while the ATO consults affected groups.
For business owners managing GST, PAYG instalments and income tax obligations, the decision may provide some additional flexibility.
What has changed?
The Government has provided transitional funding so the ATO can continue accepting credit card transactions until 30 June 2027.
During this period, the ATO will consult businesses and individuals about alternative arrangements, particularly for taxpayers experiencing financial hardship.
The Government has also asked the ATO to consider the needs of taxpayers who cannot readily use other payment methods.
9 October 2026
The Government announced the extension of direct credit card payments.
30 June 2027
Current end date for direct ATO credit card acceptance.
From 1 July 2027
Credit card payments are expected to remain possible through third-party payment providers. Direct ATO credit card acceptance is not currently scheduled to continue.
Why did the ATO plan to stop accepting credit cards?
The original decision followed changes to Australia's card payment surcharge rules.
From 1 October 2026, new restrictions prevent merchants from passing certain card processing costs directly to customers through surcharges.
The ATO explored whether it could continue accepting credit cards without imposing a significant cost on taxpayers.
It also approached card companies about lower processing fees.
The Government said the fees offered were not sufficiently low for the ATO to continue accepting credit cards on an ongoing basis.
The temporary funding arrangement gives the ATO more time to consult before the payment option is withdrawn.
Why does this matter to small businesses?
Business income and tax payment dates do not always occur at the same time.
A business may have issued invoices but still be waiting for customers to pay.
Meanwhile, its BAS or income tax payment may already be due.
Some businesses use a credit card to manage that short-term timing difference.
Removing direct credit card payments could require those businesses to use cash reserves, arrange alternative finance or negotiate a payment plan.
The Australian Small Business and Family Enterprise Ombudsman welcomed the extension, noting the importance of flexible payment options for small business cash flow.
How many taxpayers use credit cards to pay the ATO?
According to the Government, just over 2% of individuals and around 5% of small businesses paid via credit card in 2024–25.
These figures suggest most taxpayers use other methods.
The effect of removing the option may still be significant for businesses that rely on it.
If your business regularly pays tax by credit card, it is worth reviewing what you would do if direct payments were no longer available.
What payment methods are available?
Taxpayers can use several methods to meet their ATO obligations.
| Payment method | Availability | Considerations |
|---|---|---|
| Direct credit card | Available until 30 June 2027 under the announced extension. | Check card limits, interest and repayment terms. |
| Debit card | Continues as an ATO payment option. | Payment generally draws on available funds. |
| BPAY or bank transfer | Continues as an ATO payment option. | Check processing times and payment references. |
| Third-party credit card provider | Expected to remain available after June 2027. | Provider fees, processing times and terms may apply. |
| ATO payment plan | May be available to eligible taxpayers. | Interest may apply and future obligations must be managed. |
Are credit card payments free?
The ATO is not currently applying a separate card payment surcharge to direct card payments.
This does not mean using a credit card is always cost-free.
Your card issuer may charge interest if you do not repay the balance within the applicable period.
Some cards also have annual fees or different reward conditions for government transactions.
Third-party payment providers may charge their own fees.
Before choosing a payment method, compare the total cost, including interest, fees and repayment terms.
Paying a $20,000 tax bill
Assume a third-party payment provider charges a fee equivalent to 1.5% of the payment.
The fee would be:
$20,000 × 1.5% = $300
If you also carry a credit card balance, interest may increase the total cost.
The 1.5% fee is illustrative, not a quoted rate from a provider.
What happens if you cannot pay your tax bill?
A credit card is one way to fund a payment. It is not the only option for taxpayers experiencing cash-flow pressure.
If you cannot pay an ATO liability in full, you may be able to arrange a payment plan.
The ATO assesses payment arrangements based on the taxpayer's circumstances and relevant eligibility conditions.
Interest may continue to accrue on outstanding amounts.
You should also continue lodging required tax returns and activity statements on time, even if payment is difficult.
Contacting the ATO or your accountant early may help you understand the available options.
Roy Sanderson's view: Keep credit card payments available
In RJS TV, Roy Sanderson welcomed the Government's decision to extend credit card payments.
His preference is for the ATO to retain direct credit card payments indefinitely, rather than withdrawing the option after June 2027.
This reflects his view that taxpayers should have flexibility in how they meet their tax obligations.
The Government has not announced that direct credit card payments will continue indefinitely.
Roy's position is commentary on the policy, not a statement of an existing permanent arrangement.
What should businesses do before June 2027?
Identify which obligations are currently paid by credit card.
Review bank transfers, debit cards, third-party providers and payment arrangements.
Forecast BAS, PAYG and income tax obligations against expected receipts.
Confirm the final payment arrangements before the transition date.
Business tax payment checklist
- Identify upcoming BAS and tax payment dates.
- Review whether your business relies on credit cards.
- Check credit card interest and repayment conditions.
- Compare alternative payment methods.
- Allow time for payments to be processed.
- Check third-party provider credentials before making payments.
- Review short-term cash-flow forecasts.
- Discuss payment difficulties before liabilities become overdue.
- Monitor further ATO announcements before June 2027.
Frequently asked questions
Can I still pay the ATO with a credit card?
Yes. The ATO will continue accepting direct credit card payments until 30 June 2027 under the announced extension.
Will the ATO accept credit cards after June 2027?
Direct ATO credit card acceptance is currently scheduled to end after 30 June 2027. Third-party providers are expected to remain an option, subject to their terms and fees.
Why is the ATO stopping direct credit card payments?
The decision relates to card processing costs following changes to Australia's surcharge rules. The Government is funding a temporary extension while consultation continues.
Does paying tax by credit card delay the tax due date?
No. Your tax obligation remains due on the applicable date. Using a credit card changes how the payment is funded, not the tax deadline.
Can I use a credit card to pay my BAS?
Eligible ATO tax obligations, including BAS liabilities, can generally be paid using accepted payment methods. Check the current ATO instructions for your specific liability.
Can I arrange an ATO payment plan instead?
Eligible taxpayers may be able to arrange a payment plan. Interest and other conditions may apply. Contact the ATO or your accountant to review your circumstances.
Plan ahead rather than waiting for the deadline
The extension gives businesses more time to prepare for a potential change in how they pay tax.
If your business currently uses credit cards to manage payment timing, consider the cost and availability of other methods.
Review upcoming tax obligations, forecast cash requirements and keep track of further ATO announcements.
A payment method should support your broader cash-flow position, rather than create avoidable interest or finance costs.
Need help planning your business tax payments?
Your RJS accountant can help you review upcoming tax obligations, assess payment options and consider practical cash-flow strategies for your business.
Speak to an RJS AccountantSources and further reading
Australian Treasury Ministers: ATO to Continue Accepting Credit Cards Until 30 June 2027
South Australian Government: More Time to Change How You Pay Your Tax
Australian Taxation Office: How to Pay
Australian Small Business and Family Enterprise Ombudsman: Credit Card Payment Extension
Information current as at 27 October 2026.
This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional adviser.
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