The tax office planned to stop taking credit cards after 30 November. Eight days later the government paid for more time. What moved, what did not, and where the new date lands on a builder’s BAS calendar.

For eight days in October, builders who pay their BAS on a credit card were looking at a countdown to 30 November.

On 1 October 2026, the Australian Taxation Office announced it would stop accepting credit cards after that date. On 9 October, after a week of pushback from business groups, the federal government stepped in with transitional funding and the cut off moved to 30 June 2027.

That is a genuine reprieve. But it is a delay, not a reversal. And the new date sits at a point on the tax calendar that matters for anyone running a building business.

The ATO will keep accepting credit cards until 30 June 2027

The ATO confirmed on 9 October that it will keep taking credit card payments for tax obligations until 30 June 2027, following discussions with government and the provision of transitional funding.

The joint release from the Treasurer and the Minister for Small Business said the cost will be finalised in the government’s mid year budget update. It said the extra time would let the ATO engage with small businesses and other taxpayers who rely on credit cards, and consult on targeted options to support those affected.

For now, card payment fees do not apply to ATO payments, according to the ATO’s payment details page. Before the surcharging rules changed, the ATO passed that fee on to the taxpayer paying by card.

Why the ATO wanted to stop taking credit cards

The trigger was the Reserve Bank. In its March 2026 conclusions, the RBA decided to remove surcharging on debit, prepaid and credit cards on the eftpos, Mastercard and Visa networks from 1 October 2026, alongside lower caps on the interchange fees businesses pay.

That left the ATO with the same problem every business accepting cards now has. The fee still exists. It just can no longer be added on top.

In a statement on 2 October, Commissioner of Taxation Rob Heferen said merchant fees on credit card payments were estimated at almost $200 million a year and expected to keep rising. He said absorbing that on an ongoing basis was not tenable, and that because tax liabilities are set in law, the ATO cannot build card costs into its prices the way a business can. The ATO had asked the card companies for a lower rate, and they declined.

Around 5 per cent of small businesses paid tax by credit card

The ATO’s own figures frame this as a minority issue. Credit cards made up about 2.3 per cent of total ATO collections in the year to 30 June 2025. More than 60 per cent of credit card payments by value came from privately owned and wealthy groups, and public and multinational businesses.

The small business figure tells a different story. Around 5 per cent of all small businesses used a credit card to pay their tax obligations that year, according to the Commissioner. Just over 2 per cent of individual taxpayers did.

Five per cent of small businesses is not a rounding error. And building is an industry where uneven cash flow is the normal state of things, not the exception.

The Australian Chamber of Commerce and Industry led the business response. It argued the decision created a double standard, with small businesses expected to absorb card costs under the surcharge ban while a government agency declined to do the same. After the delay was announced, ACCI welcomed the breathing space and called for genuine consultation with business on what comes next.

The April to June 2027 BAS is the first one outside the window

This is the detail that is easy to miss.

Credit cards are accepted until 30 June 2027. But the BAS for the April to June 2027 quarter is not due until 28 July 2027, under the ATO’s standard quarterly BAS due dates.

So the reprieve covers three more quarterly BAS payments, not four. The June quarter BAS, paid in July, is the first one that cannot go on a card directly.

Monthly lodgers reach the same point on the same timetable. The May 2027 monthly BAS is due 21 June, inside the window. The June 2027 statement is due 21 July, outside it.

What a credit card actually does for a builder’s BAS

For a builder who uses it, a credit card on the BAS is rarely about points. It is about timing.

The BAS bill lands on a fixed date. Builder cash arrives when progress claims are paid, which rarely lines up with the 28th. Paying on a card moves the actual cash outflow from the BAS due date to the card’s statement due date. Depending on the card, that can be several weeks.

That gap is part of the wider challenge of managing cash flow between progress claims, and it has already narrowed this year. Since 1 July 2026, payday super has required super contributions to reach employees’ funds within 7 business days of each payday, removing the quarterly buffer many employers relied on. We covered that shift in the payday super cash flow squeeze earlier this year.

Paying late is the expensive alternative. The general interest charge on overdue tax is 11.51 per cent a year for the October to December 2026 quarter, calculated daily. And GIC incurred from 1 July 2025 is no longer tax deductible.

ATO payment plans remain available. Businesses owing $200,000 or less may be able to set one up online, though plans require an upfront payment and GIC keeps accruing on the outstanding balance.

The government has paid for time, not for a permanent fix.

What happens after 30 June 2027 is still being worked out

Three questions remain open.

The first is cost. The transitional funding covers the rest of this financial year, with the final figure to be set out in the mid year budget update. There is no public commitment beyond 30 June 2027.

The second is the card companies. The ministerial release said the ATO will keep engaging with them on fees. A lower rate would change the ATO’s numbers. Nothing on the public record says one is on offer.

The third is alternatives. The ATO has said it will consult on how to support people in financial hardship and identify alternative arrangements for businesses and individuals who cannot pay by other methods.

What is already settled is the fallback. After 30 June 2027, taxpayers who want to keep paying tax by credit card can do so through third party payment providers. The ATO has encouraged anyone considering one to look carefully at fees, charges and processing times, and to verify a provider’s credentials before sharing information, given the risk of scams.

Debit card, BPAY and direct deposit remain available directly with the ATO.

Paying the ATO directly by credit card versus through a third party provider

Paying the ATO directly by credit card means using the ATO’s own card payment service, with the ATO meeting the merchant fee. A third party payment provider is a separate business that charges the taxpayer’s card and pays the ATO on the taxpayer’s behalf, usually charging its own fee. Direct credit card payments to the ATO end after 30 June 2027. Payments made through third party providers can continue after that date.

THE GOOD BUILDER TAKE

The headline is that credit cards survive at the ATO until mid 2027. The more useful point is narrower. Three more quarterly BAS payments can still go on the card directly. The fourth cannot.

For a business that has been using the card as a cash flow bridge, the next eight months are a window to work out whether that bridge is a convenience or a dependency. Those are different problems. Only one of them is solved by changing how the bill gets paid.

The deadline moved. The cost did not.

Nothing about the ATO’s underlying position has changed. The card fees are still there, and the card companies have not cut them. The government has paid for time, not for a permanent fix.

For builders, that makes 30 June 2027 a date worth knowing, and 28 July 2027 a date worth knowing better.

We will keep tracking the consultation and the budget update costing as they land. Follow The Good Builder for updates, and catch Az on The Good Builder Podcast for the builder’s view on what is moving in the industry.

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Last updated 12 October 2026. Dates and figures current as published by the ATO, the RBA and the Treasury ministers on that date.

General Information Only: This article provides general information only and does not constitute financial, tax or legal advice. It does not take into account your personal circumstances. You should seek advice from a registered tax agent or qualified professional before making decisions about your tax obligations. The Good Builder makes every effort to ensure information is accurate at the time of publication, but laws, rates and dates can change.

Author: TGB Editorial