How to pay your tax bill by credit card payment

Information verified correct on December 9th, 2016

The tips, tricks and insights you need to know to pay your tax bill with your credit card.

Charging this year’s Australian Taxation Office (ATO) bill to your credit card could be a convenient and potentially rewarding way to settle your taxes. But it's important to know your way around the system and get your figures right so that you can keep the costs of using credit to a minimum. Read on to learn how you can pay your tax bill with your credit card and which cards will offer you the most rewards.

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

If you’re looking to pay your tax bill with your credit card, 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.

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.

Once you have these details handy and are aware of the cost, you can begin the payment process. You can either pay your ATO bill with your credit card online or over the phone.

Pay Online

If your myGov account is linked to the ATO, you can easily pay through myGov:

  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.

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

Pay 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.

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.

Why pay your tax bill with a credit card?

When compared to using BPAY, direct debit, direct credit or the good old-fashioned cheque, paying your tax bill with your credit card is an option that could earn you rewards points for every dollar you spend. This can be a convenient way of settling your tax debt while also boosting your frequent flyer balance or other rewards point balance. As a result, reward points are a popular reason people choose to pay ATO bills with a credit card.

Unfortunately, the range of credit cards that offer points for ATO transactions has shrunk in recent years, leaving only a handful of options. American Express is currently one of the few companies that openly provides information about earning points on tax payments in their card’s terms and conditions.

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.

The perks of using a credit card to pay your tax bill

  • Earn rewards. Depending on the card you use, you could earn rewards points when you use your credit card to pay your tax bill. Unfortunately, the list of credit cards that let you do this is limited. You can see a full list of the cards that let you earn rewards points on ATO payments here. To determine whether a card that earns ATO points is worth it, consider the surcharge and whether it 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.
  • 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.

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.Back to top

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