The Taxable Payments Annual Report (TPAR) is a report businesses from specific industries must submit to the ATO annually by the 28^th of August each year. The report provides a list of all payments made to each contractor throughout the year.

The main purpose of the TPAR is to ensure that End of Year work and tax returns within the selected industries are properly lodged and that the right income amounts are declared. The ATO uses these reports in conjunction with tax return lodgements and data matching systems, to detect Contractors who are lodging their tax returns without including all income.

The Business which are part of the following Industry Sectors are required to report Taxable Payments to the ATO:

• Building & Construction
• Cleaning Businesses
• Couriers
• Road Freight Transport
• Security Providers
• IT Consultants and Providers

More information on the Taxable Payments Annual Report requirements for each industry is available on our Taxable Payments Annual Report Factsheet.

Details required to lodge the report

The report must include the following information for each contractor:

• The contractor’s name, address and ABN;

• The total amount paid or credited to the contractor over the Financial Year;

• Whether any GST has been paid.

The information included in the report is generally outlined on the invoices received from the Contractors. It is important to check the way contractor details and payment information are recorded to ensure the required information to lodge the report is included.
Note: Businesses are not required to supply notice to their subcontractors of the taxable payments and GST reported to the ATO.

Set up the TPAR Group

1. Go to Contacts > All Contacts
   
   è  The Contacts screen
   
   
   
2. Click on New next to the Groups Heading
   
   è  The Create contact group screen opens
   
   
   
   
3. Name the new Group TPAR or Subcontractors-TPAR
4. Click on [Save]
   
   è  All Subcontractors Contacts in Xero that need to be included in the TPAR report will need to be added to this group

Set up the TPAR Report

1. Go to Accounting > Reports
2. Under the Tax Heading select the report: Taxable Payments Annual Report
   
   è  The Taxable Payments Annual Report
   
   
   
   
3. Click on [Set up TPAR]
   
   è  The Set up rules for your report screen opens
   
   
   
   
4. Select the following details:
   • Contacts > Select the TPAR or Subcontractor-TPAR group
   • Accounts > Select: All Accounts
5. Click on [Save]
   
   è  The Report will now show all subcontractors linked to the TPAR Group split into two areas: Needs Attention (contacts with missing details) and Ready for Lodgement
   
   
   
   
6. Once you have entered all the missing details for the subcontractors listed in the Needs attention area, the report is ready for lodgement.