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How to pay your tax bill by credit card

Whether you want to settle your tax debt quickly or earn more reward points, here's what you need to know to pay your tax bill with a credit card.

If you have to make a payment to the Australian Taxation Office (ATO), using your credit card could be a convenient and potentially rewarding way to do it. As well as giving you the flexibility of making repayments over time, some credit cards also offer reward or frequent flyer points for ATO payments. But using a credit card to pay your tax bill can also attract fees and specific terms and conditions.

Use this guide to learn about the ways you can pay your tax bill with your credit card and the fees involved. You can also find out when you'll earn credit card points for ATO payments and compare cards that offer rewards so you can decide if this is the right way for you to pay your taxes.

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How can I pay my tax bill with a credit card?

You can use your credit card to make a payment to the ATO online or over the phone. But before you get started, make sure you have the following handy:

  • A Visa, Mastercard or American Express card.
  • Your payment reference number (PRN) or electronic funds transfer (EFT) code. This number can be found above the bar code on your payment slip or debt notice, or online via myGov.

ATO credit card payment fees

When paying the ATO with your credit card, a card payment fee applies. The fee is a percentage of the payment you make and varies depending on the type of card you use. The current rates are:

  • Visa and Mastercard payments: 0.54%
  • American Express: 1.45%

This fee is exempt from the goods and service tax or GST, and is equivalent to the fee that the ATO incurs from its banker. You will be informed of the fee and total transaction amounts before finalising your payment.

How to make an ATO payment through myGov using your credit card

If your myGov account is linked to the ATO, you can easily pay through this service using the following steps:

  1. Log in to your MyGov account.
    mygov-login
  2. Select the "Australian Taxation Office" link.
    mygov-services
  3. Click on the "Tax" column, select "Payments" and then "Payment Options".
  4. Select the card payment option and follow the prompts to complete the payment.

How to pay the ATO through the Government EasyPay website

You can also use the Government EasyPay website, which is a secure online payment service provided by the ATO and the Reserve Bank of Australia. Before starting, make sure you have a secure Internet connection and a compatible web: Windows IE 8 or later, Mozilla Firefox 4 or later, Google Chrome 4 or later. Then:

  1. Go to the Government EasyPay website
  2. Select "Make a payment" on the EasyPay website. You will then be taken to a secure payment page.
    government-easypay-01
  3. Enter your EFT or PRN code, and key in your payment details. This includes the amount you are paying, your credit card number, expiry and security code, as well as the amount payable.
  4. Take note of the credit card fee. Ideally, it should be less than the value of the reward points you are earning.
  5. Select "continue" to complete the transaction.

government-easypay-02

Paying by phone

For tax payments between $10 and $50,000, call 1300 898 089 for the Government EasyPay self-help telephone service and follow the prompts.

ATO payments deadline

Note that all payments must be received by the Tax Office on or before the deadline provided on your Tax Notice. Transactions done outside regular office hours on weekends or public holidays, or after 6:00 PM weekdays (Sydney time) are processed the following business day. Take these details into consideration when paying, especially if you’re running close to the deadline, because late payments may be penalised with additional fees.

When will I earn points for using a credit card to pay my tax debt?

While reward points are a popular reason people choose to pay ATO bills with a credit card, the range of credit cards that offer points for ATO transactions has shrunk in recent years. So, if you have a rewards credit card you plan to use, refer to the program's terms and conditions to find out if government payments count as "eligible purchases" that earn rewards points. And if you're on the market for a new credit card, you can search and compare those that specifically mention the earn rate for ATO and government payments.

Compare credit cards that earn points for tax payments

Rates last updated September 20th, 2017
Name Product Bonus Points Rewards Points per $ spent (VISA/MC) Rewards Points per $ spent (AMEX) Purchase rate (p.a.) Annual fee Product Description
American Express Explorer® Credit Card
100,000 bonus points
2
20.74% p.a.
$395 p.a.
Receive a $400 Travel Credit every year and up to two entries per year to the American Express Lounge at Sydney International Airport.
American Express Essential®  Credit Card
1
14.99% p.a.
$0 p.a.
Receive a $50 credit when you apply online, are approved and spend $750 on your new card within the first 3 months of card membership.
American Express Platinum Edge Credit Card
1
20.74% p.a.
$195 p.a.
Receive a $200 Travel Credit every year and complimentary domestic and international travel insurance.
American Express Platinum Card
100,000 bonus points
1
$1,200 p.a.
Receive an annual $300 Platinum Travel Credit, membership to an elite tier of partner programs and access to more than 1,000 VIP lounges.
American Express Velocity Platinum Card
50,000 bonus points
0
1.5
20.74% p.a.
$375 p.a.
Receive a complimentary Virgin Australia return Economy domestic flight each anniversary year and complimentary travel insurance.
Qantas American Express Premium Card
30,000 bonus points
1.25
20.74% p.a.
$249 p.a.
Enjoy two complimentary Qantas Club lounge invitations per year, plus the protection of complimentary travel and purchase insurance.
David Jones American Express Platinum Card
40,000 bonus points
1
20.74% p.a.
$295 p.a.
Receive invitations to exclusive Season Launch Parades and fashion events, complimentary priority delivery and personal shopping perks.
American Express Business Card
0
1
$109 p.a.
While paying tax bills earn 0.5 reward point per dollar. Also earn up to 1 Membership Rewards point per dollar spent on eligible purchases.
David Jones American Express
20,000 bonus points
1
20.74% p.a.
$99 p.a.
While paying tax bills earn 1 reward point per dollar. Also earn up to 1 Membership Rewards point per dollar spent on eligible purchases.
American Express Platinum Business Card
120,000 bonus points
0
1
$1,500 p.a.
Enjoy a platinum business concierge, complimentary Virgin Lounge access, worldwide travel insurance and luxury hotel benefits.
American Express Gold Business Card
10,000 bonus points
0
1
$169 p.a.
Take advantage of no pre-set spending limit, data that feeds to MYOB accounting software and up to 51 days interest-free on purchases.
David Jones American Express Platinum Card - Qantas Frequent Flyer
30,000 bonus points
0
0.75
20.74% p.a.
$295 p.a.
Fly faster with up to 3 Qantas Points per $1 spent and receive complimentary travel insurance when travel is booked on your card.
American Express Qantas Business Rewards Card
100,000 bonus points
1.25
$450 p.a.
Earn up to 2 Qantas Points per $1 spent on eligible purchases and enjoy up to 51 days interest-free on purchases.

Compare up to 4 providers

Find out more about earning rewards for tax payments here

What other benefits are there for using a credit card to pay your tax bill

As well as the potential points you could earn, there are several other reasons you might choose to pay the ATO by credit card. We've outlined these below.

  • Build credit history. Payments like these, if promptly repaid, can help establish a healthy credit history over time, which in turn helps with getting your future credit or loan applications approved. See more ways to improve your credit rating.
  • Ease cash flow. Charging a large lump sum payment like your tax bill to your credit card can help with cash flow, but be careful about incurring interest fees on your account.
  • Earn interest on early tax. On the flipside, the ATO will pay you interest on your tax payment if you pay it more than 14 days before the due date. You are eligible to claim this interest amount back as a credit on your tax return. See the ATO website for more about calculating interest on early payments and overpayments of tax.
  • Claim back your credit card fee as a tax deduction. In some circumstances it is possible to claim your credit card annual fee as a tax deduction. In general, it is deductible in connection with business tax liabilities and not personal income tax liabilities or penalties. Find out more specific details on the ATO website when filing for a tax deduction.

What else do I need to consider when using a credit card to pay the ATO?

Make sure you also look at the following factors before pulling out plastic for your ATO payments:

  • Surcharges. The ATO applies a surcharge to all card payments, which could impact on the value of any rewards you may earn. Make sure you consider whether this cost will outweigh the value of the points. For example, using your American Express card for ATO payments will attract a 1.45% fee, which could be worth more than the value of the rewards.
  • Interest charges. If you use your credit card to pay the ATO and don't clear the balance by the due date on your statement, you'll end up paying interest on this debt.
  • Interest-free days. Some cards that offer interest-free days specify that they are only available for "eligible purchases". While most providers do consider government payments as "eligible", some may exclude them from this benefit, meaning interest would be charged from the date you paid the ATO. Check your card's terms and conditions or contact the customer service team to find out if this affects you.

While tax time isn’t the merriest of occasions, being able to get something back while paying your dues may be of comfort. Remember to do your sums before deciding how to pay to make sure that you get the most value from however you decide to pay your tax.

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