ATO credit card payments will not end this month after all. Individuals and small businesses who pay their tax on a credit card can keep doing so directly with the Australian Taxation Office until 30 June 2027. The federal government stepped in with emergency funding after a fierce backlash.
If you are confused about the date, you are not alone. The ATO first announced on 1 October that it would stop accepting credit cards after 30 November 2026. That date still appears on its original media release and in early news coverage. Eight days later, on 9 October, the Tax Office issued a new release confirming it “will continue accepting credit card payments for tax obligations until 30 June 2027”. The later date is the one that stands.
Why the ATO wanted to end credit card payments
The original decision followed the Reserve Bank’s review of card payment costs and surcharging. From 1 October, Commonwealth agencies could no longer pass card surcharges on to customers. That meant the ATO would have had to swallow the merchant fees itself, a bill reported to be about $200 million a year.
“As a government agency, the ATO has decided it would not be appropriate for the cost of credit card merchant fees to be transferred to the community.” — ATO media release, 1 October 2026
In an internal note to staff, obtained by The Mandarin, Commissioner of Taxation Rob Heferen wrote: “This wasn’t a decision we took lightly.”
The ATO says about 2.3 per cent of tax payments were made by credit card in 2024–25. More than 60 per cent of card payments came from privately owned and wealthy groups and from public and multinational businesses. Treasury puts it another way: just over 2 per cent of individuals and around 5 per cent of small businesses paid by credit card.
Backlash forces a U-turn on ATO credit card payments
Small business groups were furious and called it a double standard. Businesses are now expected to absorb card costs under the surcharge ban, yet the Tax Office planned to refuse credit cards altogether. Many owners rely on a credit card to bridge the gap when a large tax bill lands before their customers have paid them.
On 9 October, Treasurer Jim Chalmers announced transitional funding so the ATO could keep accepting credit cards until the end of the financial year. The cost will be finalised in the Mid-Year Economic and Fiscal Outlook. Prime Minister Anthony Albanese has since said he intervened after a text message from Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry.
The political row has not gone away. On the ABC’s Insiders on 18 October, Assistant Treasurer Daniel Mulino admitted the government had known since July that the ATO was considering the move. He warned that accepting credit cards “going on indefinitely, would have very serious fiscal ramifications for the budget”.
McKellar called it “a completely deficient policymaking process that took small business for granted”. Shadow Treasurer Tim Wilson said the government “had three months to fix this” and “only stepped in when the backlash got too loud to ignore”.
What happens to ATO credit card payments after 30 June 2027
The reprieve is temporary. According to Treasury, once the transition period ends you will still be able to pay by credit card through third-party providers, which usually charge their own fees. Free and low-cost options such as debit card and bank transfer will also remain available.
The ATO says it will keep consulting on hardship support and alternative arrangements. Before you use a third-party provider, it urges you to compare fees, charges and processing times, and to check that the provider is legitimate.
What taxpayers should do now
For now, nothing changes: ATO credit card payments carry on as normal until 30 June 2027.
If you have a payment plan or direct debit linked to a credit card, use the next few months to set up another way of paying. You can change your arrangement at ato.gov.au/managepaymentplan.
If cash flow is the worry, contact the ATO on 13 11 42 or speak to your registered tax agent about a payment plan before the deadline, rather than after it.
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