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How to pay your tax bill by credit card

Information verified correct on April 27th, 2017

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.

American Express Explorer Credit Card

American Express Credit Card Offer

Receive up to 100,000 Membership Rewards Points on signup and $400 travel voucher each year. Plus, you can earn up to 2 reward points per $1 spent on eligible purchases.

  • $395 p.a. annual fee
  • 20.74% p.a. on purchases
  • 0% p.a. for 12 months with 1% balance transfer fee on balance transfers
  • Up to 55 days interest free
  • Minimum Income Requirement of $65,000 p.a.

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 April 27th, 2017.

American Express Platinum Card

100,000 bonus points offer has been extended until 1 May 2017

January 31st, 2017

American Express Platinum Edge Credit Card

First year annual fee waiver, 0% balance transfer and 5,000 bonus points offers have been extended.

March 28th, 2017

American Express Explorer Credit Card

Bonus points offer has been changed from 50,000 to 100,000 points and is valid until 15 May 2017.

March 28th, 2017

View latest updates

Jonathan Choi Jonathan
Rewards Points per $ spent (VISA/MC) Rewards Points per $ spent (AMEX) Bonus Points Annual fee
American Express Explorer Credit Card
Receive 100,000 Membership Rewards Bonus Points on eligible spend within the first 3 months of card membership. Also enjoy a $400 travel voucher and two complimentary airline passes per year.
2 100,000 bonus points $395 p.a. Go to site More info
American Express Essential®  Credit Card
Receive a $50 credit on eligible spend and get Smartphone screen insurance combined with a no annual fee for life card. Also enjoy a 0% p.a. balance transfer rate for 12 months.
1 $0 p.a. Go to site More info
American Express Platinum Edge Credit Card
Receive 5,000 Membership Rewards Bonus Points when you meet the minimum spend requirement. Enjoy a $200 travel credit every year and pay no annual fee for the first year.
0 1 5,000 bonus points $0 p.a. annual fee for the first year ($195 p.a. thereafter) Go to site More info
American Express Platinum Card
Receive 100,000 Membership Rewards Bonus Points when you meet the minimum spend requirement and earn up to 3 points per $1 spent. Gain access to travel insurance, $300 Platinum travel credit every year and access to 1,000 VIP airport lounges.
0 1 100,000 bonus points $1,200 p.a. Go to site More info
American Express Velocity Platinum Card
Receive 50,000 bonus Velocity Points when you apply online, are approved and meet the minimum spend required, plus take advantage of the 0% p.a. for 12 months balance transfer offer. Also receive a complimentary return flight every year.
0 1 50,000 bonus points $349 p.a. Go to site More info
Qantas American Express Premium Card
Earn 60,000 bonus Qantas Points when you apply as a new card member and meet the minimum spend requirement. Plus enjoy frequent flyer benefits including uncapped Qantas Points per $1 spent, complimentary travel insurance and Qantas Club lounge invitations.
1.25 60,000 bonus points $249 p.a. Go to site More info
David Jones American Express Platinum Card
Earn 40,000 Membership Rewards points when you spend outside of David Jones 3 times within the first month of card approval.
1 40,000 bonus points $295 p.a. Go to site More info
American Express Business Card
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.
0 1 $109 p.a. Go to site More info
American Express Platinum Business Card
Receive 100,000 bonus points when you meet the minimum spend requirement and earn up to 2 Membership Rewards points for every dollar spent.
0 1 100,000 bonus points $1,500 p.a. Go to site More info
American Express Gold Business Card
Enjoy 24-hour worldwide service plus a great range of tailored expense management solutions designed to help maintain control of your corporate expenses.
0 1 10,000 bonus points $169 p.a. Go to site More info

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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