Sole traders: ATO credit card deadline is now 30 June 2027

If you have been bracing for a 30 November cut-off on paying tax bills by credit card, that date has moved. On 9 October the Treasurer, the Small Business Minister and the Assistant Treasurer said in a joint statement that the government will provide transitional funding so the ATO can keep accepting credit card transactions until the end of the financial year, which pushes the change out to 30 June 2027. ABC News covered the announcement and the reaction from business groups. The ATO had said on 1 October that it would stop accepting credit cards after 30 November 2026, leaving roughly two months to change payment arrangements, and the government has now accepted that two months was not long enough. For a sole trader the practical effect is short: nothing has to change in November, and there are around eight more months to work out how the next tax bill gets paid.

General information, not tax advice. The ATO is the authority - see ato.gov.au or ask a registered tax or BAS agent.

What the new date actually covers

Credit cards keep working for payments to the ATO until 30 June 2027. That covers the things a sole trader pays: income tax, activity statements, PAYG instalments, and instalments under a payment plan. Debit cards were never part of the change and are not affected.

Two details in the reporting are worth holding on to. The first is that the reprieve is funded, not reversed: the ATO had said absorbing card acceptance fees would cost it around $200 million a year once it could no longer pass them on, and the government is covering that cost for one year only, with the final figure to be settled in the mid-year budget update expected in December. The Assistant Treasurer has said the funding will not be extended beyond next year. The second is what happens after the date. ABC News reported that paying the ATO by credit card after 30 June 2027 is expected to run through a third-party provider rather than the ATO directly, which usually means a fee on top of the tax. So the direction of travel has not changed. Only the runway has.

If you would rather not revisit this in June, the ATO’s other payment options page lists what stays open and costs nothing to use, including debit card, BPAY, direct debit, direct deposit, Government EasyPay, Australia Post and mail.

Payment plans, and letters that may now be out of date

A one-off payment is easy to redirect on the day. A payment plan is not, because it draws on whatever method is attached to it whether or not anyone is watching. Under the original announcement, a plan linked to a credit card needed a different method before the first instalment falling due after the cut-off, and the ATO said it was writing to the people affected.

That deadline has now shifted, which creates a small trap: a letter that arrived in the first week of October names the old date. If one turned up, it is worth checking the current position rather than acting on the letter alone. The ATO’s guidance on managing your payment plan covers changing the method a plan draws on, and a plan can be moved to direct debit well before the deadline rather than at it. A missed instalment, by contrast, can move a plan into arrears.

What the extra months are good for

Eight months of notice is only useful if something changes in it. Three things are worth a look.

Work out what the card was doing for you. For some sole traders it is rewards. For many more it is time - a few weeks between a tax due date and client money landing. Those are different problems with different fixes, and it helps to know which one you have before June.

Put tax money aside as income arrives rather than finding it on the due date. A share of every payment received, moved to a separate account the same week, removes most of the reason a card ever gets reached for. It also means a quarterly activity statement stops being a surprise. The ATO publishes the due dates for lodging and paying your BAS, and those dates are the ones to plan the set-aside around.

Check whether the card is actually cheap. A credit card cleared in full each month is a free float. One carrying a balance is an expensive loan against a tax debt, and interest on it may not be deductible in the way people assume.

If the card was covering a shortfall, not earning points

Paying tax on a card to get through a tight month is a signal, not a strategy, and the ATO has its own route for it. The help with paying pages set out payment plans, and the what if you can’t lodge and pay on time page is clear that lodging on time still matters even when paying in full is not possible. Asking early generally opens more options than missing a date and explaining afterwards. The government has also asked the ATO to consult on support for taxpayers facing hardship as part of the delay, so what is available may widen before June.

The other half of the picture is the money coming in. Apsis can make that part visible: the business overview has a cash-flow card showing expected receipts from sent and part-paid invoices due in the next 30 days, which is the figure to hold against a tax amount before it falls due. The invoice list filters by status and flags overdue rows, so chasing slow payers is a short job rather than a hunt. On the paid plan, invoice reminders go out for you, and the tax module adds a GST and BAS view with an income tax estimate, so the number you are planning for is not a guess.