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Should you pay the ATO with a credit card to earn points?


Low earn rates and a card payment fee mean that using a credit card to settle your tax debt could cost you more than it’s worth.

Earning points on a credit card could seem like a nice way to get something extra when you have to make a payment to the Australian Taxation Office (ATO). Unfortunately, there are a limited number of credit cards that offer rewards for tax payments – and they usually offer a reduced rate of points per $1 spent compared to regular purchases.

Depending on the card, you’ll earn between 0.25 and 1 point per $1 spent on your tax debt in 2018. You’ll also pay a surcharge that’s calculated based on the total cost of your payment, with the ATO applying the following rates for different credit cards:

  • American Express: 1.45%
  • Australian Visa credit cards: 0.78%
  • Australian Mastercard credit cards: 0.4%
  • International Visa or Mastercard: 2.7%

In comparison, Australian Visa or Mastercard debit cards attract a fee of only 0.15%, while bank transfers or BPAY payments offer a fee-free way to pay the ATO.

So, when you consider the fees for credit card payments, how much value can you actually get from using a reward or frequent flyer credit card to pay the ATO? Let’s take a look at a few different examples based on a tax debt of $5,000.

These rates, fees and calculations are correct as of 12 June 2018 but could change subsequently.

Paying with an American Express card

Say you want to use the Qantas American Express Ultimate for your ATO payment. This card – like most Amex cards in Australia – offers 0.5 points per $1 spent on government charges.

So, for your $5,000 debt, you would earn 2,500 Qantas Points and be charged a card payment fee of $72.50. While that’s a hefty surcharge, it is actually cheaper than buying top-up points through your Qantas Frequent Flyer account (which costs $95 for 2,500 points). If you need that many points for a reward, this could be an easy way to get them. But if not, there are plenty of other ways to earn more Qantas Points that offer better value.


Most American Express credit cards offer 0.5 points per $1 for ATO payments, either through a frequent flyer program or through the Membership Rewards program. So you can work out how many points you’ll earn by halving your tax payment. Then you can decide if the card payment fee is worth it based on how much you want the points.

Paying with a Mastercard

The CommBank Business Awards Mastercard (as well as the Gold and Platinum options) offers 1 CommBank Awards point per $1 spent on government payments. With the lower Mastercard payment fee of 0.4%, this means you’d earn 5,000 points and pay a fee of $20.

That’s just under the amount of points you’d need to redeem a $25 gift card through the CommBank Awards store (5,700 points). In fact, if you paid the ATO $5,700, the card fee would be $22.80, so a $25 gift card would offer you slightly more value in this scenario. Just keep in mind that you can only use one of these credit cards if you have a business and are paying your business tax debt.

Using an overseas Visa or Mastercard

Say you want to use a US credit card to make a $5,000 payment to the ATO. With the international card fee of 2.7%, this payment would cost you $135.

If you made this payment on the Bank of America Travel Rewards card, you’d earn 7,500 points and an equivalent value of US$75 travel credit. If you used the Chase Sapphire Preferred card, you’d earn 5,000 points that could be transferred at a 1:1 rate to frequent flyer partners including Singapore Airlines KrisFlyer and United MileagePlus – nowhere near enough for a reward flight but potentially useful if you're already close to having enough points for your chosen reward. With both these cards, the rewards don’t offer great value when you consider the card payment fee.


Using a credit card to earn points on ATO payments doesn’t usually offer good value but there may be times when you decide this option is worth it for you. For example, if you have a particular reward in mind or if you can claim the card payment fee as a tax deduction. Check out our complete guide on earning points for ATO payments made with a credit card for more details and tips.

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