How to Pay Your Tax Bill by Credit Card Payment

Posted May 25th, 2010 and last modified August 13th, 2014
Paying your taxes via credit card can be as easy as one, two, three. Know the requirements and fees to see how the system works. Paying your taxes via credit card can be as easy as one, two, three. Know the requirements and fees to see how the system works.

Tax time is always crunch time. Not everyone is organized when it comes to paying their taxes, and many are often putting it off until the very last minute. Then they have to endure long lines, long wait times and other hassles that come with paying your taxes.

The Australian Taxation Office is the Government’s principle tax collection agency. It is part of the Treasurer’s portfolio and aims to help manage taxes that fund services for the country’s citizens.

In February 2009, the ATO offered a service where tax payers can make payments online with the use of their credit card. With the launch of this service, it became more convenient for citizens to pay their dues so long as they have an Internet connection. Conditions do apply.

Making payments to ATO: what do I need?

Before using the service, you need to know the three requirements for the online payment.

  1. First, taxpayers must have an active and current Visa, MasterCard or American Express card. The service itself is free, but note that charges to your credit card will apply. According to the Australian Tax Office (ATO) website, card payment fees are 0.42% for Visa and MasterCard, while it’s 1.45% for American Express. These fees are the not subject to the goods and service tax or GST, and is equivalent to the fee the ATO gets from its banker. Before confirming your payment, the website will inform you of the total transaction fees.

  2. Second, taxpayers must have the ATO electronic funds transfer (EFT) code. The EFT code is also known as the payment reference number (PRN) and is printed directly above the bar code of the payment slip. It’s important to have this number on hand when paying through credit card.

  3. Lastly, taxpayers need to use the Government EasyPay website or telephone service when transacting. The website is secure and provided by the ATO and the Reserve Bank of Australia using the Optus SmartPay system.

Credit card payments can also be done over the telephone. The service is also provided by the Government EasyPay and is a self-help telephone service. Have your EFT code/PRN and credit card details handy when calling 1300-898-089 to make the payment. Tax payments between $10 up to $50,000 is accepted.

Note that all payments must be received by the Tax Office on or before the deadline. Transactions done beyond the regular office hours or after 6:00 PM Sydney time will be processed on the succeeding business day. The same goes for transactions received during weekends or holidays. These should be taken into consideration when paying especially when it’s close to the deadline. Late payment may be subject to penalty fees.

Keep this in mind
  • A note on Small Business Superannuation Clearing House payments:
    Payments to the clearing house service can only be made by BPAY or electronic funds transfer (EFT).

After the tax bill payment has been made, a receipt containing all the details of the transaction will be issued. It includes the tax payment as well as the card payment fee. These will be displayed as “ATO payment” and the “Card payment fee – ATO” on your card statement.

Tax Deduction

It is also possible to claim the card payment fee as a tax deduction. This is depended on several conditions, of which includes the following: The type of card used (Visa, MasterCard, American Express); the type of liability/tax being paid and the type of amount to be paid (if it’s using a credit account or is paid through debit).

The ATO website lists more details when filing for a tax deduction.

Other Payment Options

The ATO has other options for tax payment.

  • BPAY – BPAY is a third-party service launched in 1997 has been widely adopted throughout the banking sector. It provides a secure, electronic bills-payment system directly from your cheque or savings account using your financial institution’s phone or Internet banking service.
  • Direct credit allows you to transfer payment through online from a cheque or savings account.
  • Direct debit – Payment is automatically deducted from your cheque or savings account.
  • Mail – Payment is made by sending the payment slip with a cheque or money order through the postal system.

Paying from Overseas

The online and telephone payment options are also available to Australian residents who are overseas. Note that you will need an Australian bank account to make the payment from its cheque or savings. You may also want to consider the time difference so as not to have problems when making payment. The rules and conditions still apply.

With these available payment options, combined with early or on-time payment, tax time may be crunch time, but it is not as stressful.

Compare Reward Credit Cards for Paying Tax bills

Rates last updated October 25th, 2014

Interest rate (p.a.) Balance transfer rate (p.a.) Annual fee Cash advance rate (p.a.)
American Express Platinum Card
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Earn 0.5 reward points per dollar spent while paying tax bills. Enjoy 80,000 Membership Rewards Bonus Points when you spend $500 on your card. $1,200 p.a. Go to site More info
American Express Velocity Platinum Card
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Take benefit while paying tax bills and earn 0.5 point per dollar. Also receive 50,000 bonus Velocity Rewards points if you spend $500 within the first 3 months. 20.74% p.a. 0.99% p.a. for 6 months with 1% balance transfer fee $349 p.a. Go to site More info
American Express Platinum Edge Credit Card
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Earn 0.50 point per dollar while you pay your tax bills. Also receive 5,000 Membership Rewards Bonus Points on sign up. 20.74% p.a. 0.99% p.a. for 6 months with 1% balance transfer fee $0 p.a. annual fee for the first year ($195 p.a. thereafter) Go to site More info

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10 Responses to How to Pay Your Tax Bill by Credit Card Payment

  1. Default Gravatar
    Terry | November 25, 2013

    Hi. I want to pay my tax approx. $40,000 in total using my Platinum American Express Card. On the ATO website it says the rate is 1.45%. Does this mean I pay the ATO 1.45% plus an AMEX charge or does it mean I pay just the 1.45% to AMEX as my monthly charge. Please clarify my surcharges for using American Express.
    Thanks.
    Terry.

  2. Default Gravatar
    Anne | July 29, 2013

    Hello,

    Which banks issue reward points for credit card payments to the ATO for BAS, Income Tax etc. payments?

  3. Default Gravatar
    Adam | May 6, 2013

    Hello,

    I wish to make a tax payment via credit card, but the amount is higher than my credit limit.

    Is it possible to pay half the tax amount on credit card, then transfer money back to credit card so i can make the second payment?

    Or do i have the make the tax payment in one payment?

    • Staff
      Jacob | May 6, 2013

      Hi Adam. I believe it comes down to paying the full amount before the due date. I’m just confirming this with the tax office. I will reply to this message as soon as I know. Jacob.

    • Staff
      Jacob | May 7, 2013

      Hi Adam. Just had a chat with the ATO. If you’re using a payment slip, you can keep making payments up till the due date, you don’t have to pay it all in one lump sum. Jacob.

    • Default Gravatar
      Adam | May 7, 2013

      Hi Jacob,

      Thanks so much for your reply, much appreciated.

  4. Default Gravatar
    Henrik | April 25, 2013

    Commonwealth Bank excludes payment of ATO PAYG from counting towards awards points. Are there any banks that will give you awards points if you pay your tax bill with the ATO using their credit card ?

    • Staff
      Jacob | April 26, 2013

      Hi Henrick. Thanks for your question. American Express Membership Rewards points will allow you to earn points when you pay utility bills. You can compare their credit cards here. Jacob.

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