ATO Payment by Credit Card: Fees, Options and What Businesses Need to Know (October 2026)

Updated: 30 October 2026

Does your business rely on a corporate credit card to manage large ATO payments?

If so, an upcoming policy shift will directly alter your cash flow management.

The Australian Taxation Office (ATO) initially slated direct credit card payments to end after 30 November 2026. Following strong concerns from the business sector, the Federal Government announced on 9 October 2026 that this transition is deferred until 30 June 2027.

While this grants Australian businesses an eight-month preparation runway, those managing substantial Business Activity Statement (BAS) or corporate income tax obligations must evaluate alternative payment arrangements before direct access ceases.

Can You Still Pay the ATO with a Credit Card?

Yes. As of October 2026, the ATO continues to accept eligible credit card payments through its standard online portal and phone channels.

The Federal Government has temporarily stepped in to absorb merchant processing costs, preserving direct card payments through 30 June 2027 while industry consultation continues.

However, direct credit card payments through the tax office are scheduled to permanently close after 30 June 2027. Businesses should plan on the assumption that direct credit card payments through the government portal will no longer be an option from 1 July 2027.

Why Is the ATO Phasing Out Direct Credit Card Payments?

The decision stems from nationwide reforms to payment surcharge regulations enacted on 1 October 2026.

Under these updated rules, the ATO is prohibited from passing merchant card processing surcharges onto taxpayers. Previously, the taxpayer bore the processing surcharge; without this mechanism, the ATO faced an estimated $200 million annual cost to absorb credit card transactions. Rather than maintaining this expenditure, the ATO decided to decommission direct credit card facilities.

The Federal Government's temporary funding relief preserves existing arrangements until the end of the 2026/27 financial year, after which direct card settlement will conclude.

Current ATO Payment Methods: Bank Funds vs. Credit

Paying the ATO involves two distinct mechanisms: funding obligations directly from your existing capital, or leveraging external credit terms to defer cash outflow.

Relying on direct bank transfers (whether via BPAY, EFT, or direct debit) guarantees an immediate reduction in available working capital. By contrast, credit facilities delay that drawdown, preserving cash reserves during critical operational cycles.

The Working Capital Impact for Growing Businesses

Consider a quarter where a $75,000 BAS payment falls due in the identical payroll cycle as superannuation contributions and major vendor disbursements.

Drawing that entire sum directly from the operating account immediately restricts liquidity for other immediate liabilities. For established businesses navigating high transaction volumes and payroll requirements, standard credit card payment provides breathing room by deferring the net cash outflow across the card billing period.

Once direct card channels close, continuing this payment approach from your bank account will compress your available liquidity window. Preparing for this adjustment now ensures other operational obligations remain fully funded.

Case Study: Structuring Indirect Credit Card Solutions with PBS

To maintain cash flow flexibility once direct options close, businesses can leverage dedicated third-party payment platforms.

The Scenario:

A long-standing client recently partnered with us at Professional Bookkeeping Service (PBS) to manage a $60,000 ATO tax obligation. The business needed to satisfy its ATO liability on time while maintaining adequate cash reserves to service pending payroll and supplier commitments.

The PBS Solution:

We evaluated the business's rolling cash flow forecast and identified that a direct operating account withdrawal would over-tighten liquidity. Instead of settling directly from working capital, we facilitated an alternative indirect arrangement via OFX.

• The Mechanism: OFX settled the $60,000 tax balance directly with the ATO via electronic funds transfer, while billing the transaction to the client's approved commercial credit card facility.

• The Result: The client satisfied their statutory ATO deadline, preserved working cash in their primary account for immediate payroll needs, and deferred capital drawdown across their standard 45-day credit cycle, all while earning applicable card rewards points.

Third-party processors incur commercial processing fees, which must be weighed against working capital requirements and potential card rewards. However, as this engagement demonstrated, indirect routing gives established businesses an effective tool to retain credit flexibility.

Steps to Take Before 30 June 2027

1. Audit Upcoming Liabilities: Map your forecast BAS, PAYG, and corporate income tax due dates alongside major supplier and payroll runs over the next 12 months.

2. Stress-Test Cash Outflows: Model how your operating account balances will respond when substantial ATO liabilities are drawn instantly via EFT or BPAY rather than deferred through card statements.

3. Assess Third-Party Processors: Review whether platforms such as OFX or Pay.com.au fit your transaction volume. Evaluate setup criteria, fee structures, and the value of credit terms against platform surcharges.

4. Align Bookkeeping with Forward Cash Flow: Ensure your bookkeeping workflow incorporates rolling 13-week cash flow forecasts to highlight liquidity pressure points well before tax liabilities come due.

Prepare Your Business Cash Flow with PBS

Navigating regulatory updates requires accurate visibility over your financial commitments. Professional Bookkeeping Service works closely with business leaders and their accountants to manage end-to-end bookkeeping, provide reliable cash flow reporting, and implement practical payment structures.

Contact the PBS team today to review your current ATO payment setup and design a structured cash flow plan well ahead of the June 2027 transition.

References and Authoritative Sources

• Australian Taxation Office (ATO): How to Pay: Official Payment Channels and Methods

• Reserve Bank of Australia (RBA): Review of Card Payment Surcharging Framework

• ABC News: Federal Government Funds Surcharge Costs to Delay ATO Credit Card Payment Ban

• South Australian Business Chamber: ATO Credit Card Payment Ban Delayed Following Business Backlash