Australia's Tax Office to End Credit Card Payments

The Australian Taxation Office (ATO) has announced it will stop accepting credit card payments for tax bills after November 30, 2026. This decision follows a review by the Reserve Bank of Australia (RBA) concerning merchant card payment costs and surcharging.

In a statement, the ATO explained that as a government agency, it is inappropriate for the cost of credit card merchant fees to be passed on to the public. This change is expected to impact taxpayers who currently use credit cards for tax payments, including those with existing payment plans linked to credit cards.

The ATO acknowledged that some taxpayers rely on credit card payments for managing their tax obligations and understands this may necessitate adjustments. The office is committed to assisting taxpayers in transitioning to alternative payment methods and will continue to support individuals facing financial hardship or other circumstances that impede their ability to meet their tax obligations.

To facilitate this transition, the ATO is directly contacting taxpayers whose payment plans are linked to a credit card. Individuals with direct debit arrangements tied to a credit card will need to update their payment method before their next installment due after November 30, 2026, to maintain compliance with their payment plans. Guidance on updating payment methods for payment plans is available on the ATO website.

Alternative payment options can be found on the ATO website. Taxpayers requiring additional support are encouraged to visit the ATO's support page, contact the ATO directly at 13 11 42, or consult a registered tax professional.

This move by the ATO occurs as cafes and small businesses express concerns about potential price increases ahead of a nationwide ban on card payment surcharges. Effective from Thursday, RBA reforms will prevent retailers from charging customers additional fees for using cards, requiring them to absorb these costs or incorporate them into their pricing. The RBA anticipates these reforms will result in approximately $660 million in annual savings on payment costs for businesses, with the new maximum rate set at 0.30 percent, down from 0.80 percent.