ATO will stop taking credit cards: what sole traders can do

If you have been paying tax bills with a credit card, that option now has a closing date. On 1 October the ATO announced that it will stop accepting credit cards after 30 November 2026. The decision follows the Reserve Bank’s surcharging reforms, which started the same day: because a government agency can no longer pass card acceptance costs on to the person paying, the ATO said it would not be appropriate for credit card merchant fees to be carried by the community instead. Debit cards are not affected. For a sole trader this lands on three things at once - how the next BAS or instalment gets paid, any payment plan already running, and whether your own invoices still carry a card fee.

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

Check what of yours actually runs on a card

The change covers payments to the ATO generally, not one category of them: income tax, BAS, PAYG instalments, and instalments under a payment plan. It is worth going through them in one sitting. Does the quarterly BAS payment go out on a card? Does a PAYG instalment? Is a card stored inside a scheduled arrangement you set up months ago and have not looked at since? Does a bookkeeper or agent pay on your behalf using a card of theirs? The card saved somewhere a year ago is the one most likely to be missed, because nothing about it shows up until a payment fails.

Payment plans need attention first

A one-off payment is easy to redirect on the day it falls due. A payment plan is not, because it runs on its own schedule whether or not anyone is watching. The ATO’s guidance on managing your payment plan covers changing the method a plan draws on, and the announcement is explicit that a plan linked to a credit card needs a different method before the first instalment falling due after the cutoff. If the card is still attached when that instalment runs, the payment is unsuccessful, and a missed instalment can move a plan into arrears or default. The ATO has said it is writing to people whose plans are linked to a credit card, so a letter may turn up, but making the change is still the account holder’s job.

The methods that stay open

The ATO’s other payment options page lists what remains, and most of it costs nothing to use. Debit cards still work. So do BPAY, direct debit from an Australian cheque or savings account, direct deposit, Government EasyPay, paying in person at Australia Post, and paying by mail.

If the card was mainly about timing rather than points, a direct debit set up a few days ahead of a due date does the same job with no card in the chain. If it was about points, nothing through the ATO replaces it like for like. Third-party services that pay the ATO on your behalf for a fee still exist, and there it may be worth working out whether the fee leaves you ahead of the reward before building a habit around one.

Your own invoices cannot carry a card surcharge either

The reform that moved the ATO applies to what you charge clients too. The ACCC’s page on card surcharges sets out that from 1 October 2026 a business cannot add a surcharge on Visa, Mastercard, American Express or eftpos cards, whether credit, debit or prepaid. Renaming the charge as an admin fee or a service fee does not get around it and may be misleading conduct.

So if a card fee has been sitting as a line on your invoices, or as a sentence in your payment terms, or printed on a sign near the terminal, it needs to come off. Building the cost into your rates is allowed, and so is offering a discount for a different payment method, as long as nobody is misled about why a price moved. The other half of the reform is that the wholesale fees inside card acceptance were capped lower from the same date, with smaller businesses set to see a larger reduction than big ones, according to the Reserve Bank’s conclusions paper. Your next merchant statement is where to check whether any of that has reached you.

Plan the cash instead of the float

For plenty of sole traders the credit card was never about rewards. It was a few weeks of breathing room between a tax due date and client money arriving. Removing it does not change what is owed, it changes when the money has to be sitting there. Two habits cover most of the gap: put GST and tax aside as income comes in rather than finding it on the due date, and know which invoices are genuinely expected to land before that date. The second is the part usually left to memory, which is why due dates feel like a surprise.

Apsis can make that second 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 up against a BAS or instalment amount before it falls due. The invoice list filters by status and flags overdue rows, so chasing the 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. And if a card fee does need to come off your documents, invoice line items are quantity times unit price, so removing that line and letting the GST recalculate from what is left takes a moment.