Tax bills are one of the biggest expenses for any business. So wouldn’t it be nice if you could earn frequent flyer points on your payments to the ATO?
If done correctly, it is possible to pay your pay your ATO tax bill using your credit card and earn maximum rewards points.
This article will explore your options for paying the ATO via credit card, the fees associated with paying via credit card, and the best way to maximise the rewards points you receive from paying your tax bill (including a great hack for earning extra Qantas Points!).
Can you pay the ATO by credit card?
Yes, you can pay the ATO using your credit card – including Visa, MasterCard or Amex. The fees associated with paying the ATO vary based on which card you use, so make sure you use the chart below to identify exactly how much you’ll be charged in credit card fees.
Does the ATO accept Amex payments?
Yes, the ATO accepts payments from Amex cards. However, the fee for paying the ATO with an Amex card is 1.45%, which is significantly higher than other domestic credit cards.
What are the benefits of paying the ATO by credit card?
There are some good reasons why paying your tax bills by credit card makes sense:
Paying the ATO by credit card means the money doesn’t leave your bank account straight away. Instead you can hold onto your cash during the interest-free period on your credit card, and it won’t cost you any interest if you pay your credit card bill on time^. It can also help you avoid any late payment fees or interest charges if you don’t have the cash available on the due date.
Credit card fees may be tax-deductible
You may be able to claim your credit card processing fee as a tax deduction for your business, which helps offset the additional cost of paying ATO bills by credit card. However, any interest you pay for late credit card payments is generally not tax-deductible.
Paying your bills by credit card can be good for your credit history, provided you always pay your credit card bills on time.
You may be able to earn rewards points on your tax payments, which wouldn’t be possible if you pay the ATO straight out of your own pocket.
What should I watch out for when paying the ATO by credit card?
Reduced or zero rewards points earned
Traditionally, the big downside of paying ATO and government bills – and other bills such as insurance, rates and utilities – on credit card is that these billers are often categorised by your card issuer to earn reduced or ZERO credit card rewards points.
In other words, they’ll let you pay these bills using your credit card (and charge you a credit card processing fee), but you won’t get the full benefit of rewards points.
ATO credit card payment fees
Another downside of paying by credit card is that you’ll pay a card payment fee that wouldn’t apply if you were paying by direct debit.
The ATO charges the following card payment fees:
|MasterCard – International||2.70%|
|MasterCard – Domestic Debit||0.15%|
|MasterCard – Domestic Credit||0.70%|
|Visa – International||2.70%|
|Visa – Domestic Debit||0.15%|
|Visa – Domestic Credit||0.78%|
The trade off with card payment fees is that higher fee cards often earn more reward points per dollar than lower fee cards, so the extra benefit may outweigh the extra cost.
Interest if you don’t pay your card off
If you don’t pay off your credit card bill by the due date, you could end up paying additional interest to your card issuer on top of your ATO tax bills and card payment fees.
Some credit cards charge as much as 20% p.a. interest on overdue amounts, which could mean a significant penalty if you’ve put a large tax bill on your card. Again, any interest you pay for late credit card payments is generally not tax-deductible.
How do I get the most rewards point when I pay the ATO by credit card?
While some card issuers will give you reduced or zero credit card reward points when you pay the ATO, you can increase the reward points you earn by using a third-party payment service like B2Bpay.
What is B2Bpay and how does it work?
B2Bpay is a third-party payment service that allows you to pay all your business expenses* online using your credit card.
Unlike using credit cards directly, B2Bpay allows you to pay the ATO while earning FULL credit card points (including Amex).
That means you can earn at least double the credit card points^ than if you paid directly, without paying double the credit card processing fee. Plus you can receive additional bonus Qantas Points on top of that, helping your reward points stack up even faster.
How many points can I earn (and what can I do with them)?
If you paid $240,000 per year in BAS, payroll taxes and other business expenses using B2Bpay, you could earn:
- 240,000 Qantas Points (or credit card points) every year, plus
- 2,400 Qantas Points for your business every year (or even more by paying B2Bpay Bonus Billers).
That’s enough points for 2 x return Business class flights from Sydney or Melbourne to London every year, including approximately $1,517 in taxes, fees and carrier charges.
How much does it cost to use B2Bpay?
The only fee for using B2Bpay is a card processing fee – which ranges from 1.2% to 2.4% excl. GST (or 0.84% to 1.64% after eligible company tax deduction) depending on your card type.
This fee is outweighed by the value of the credit card and Qantas Points you can earn, plus the cash flow benefits of holding onto your cash longer.
Get started now
Paying your ATO bills by credit card offers a number of potential benefits for business owners, including credit card reward points. And if you’re disciplined about paying your credit card off each month, these benefits can easily outweigh the additional costs.
To start turning your tax bills into rewards points, join B2Bpay free below or click here to find out more.
^ Credit card reward points and interest free days are subject to the terms of your credit card and linked rewards program.
# A business must be a Qantas Business Rewards Member to earn Qantas Points. A one-off join fee of $89.50 including GST normally applies, however this will be waived for B2Bpay customers using this link. Membership and Qantas Points are subject to the Qantas Business Rewards Terms and Conditions. Qantas Points for business are offered under the B2Bpay Customer Terms and Conditions. Members will earn 1 Qantas Point for every $100 paid and up to 3 Qantas Points per $1.50 paid to B2Bpay Bonus Billers. See B2Bpay website for a list of current B2Bpay Bonus Billers. Qantas Points earned using B2Bpay will be automatically credited to your linked Qantas Business Rewards account within 90 days of your eligible spend as outlined in the B2Bpay Customer Terms and Conditions. Any claims in relation to Qantas Points under this offer must be made directly to B2Bpay by emailing firstname.lastname@example.org. Businesses must ensure the ABN registered with Qantas Business Rewards is saved in the B2Bpay customer profile or entered online when paying in order to earn Qantas Points.
* Use a Qantas Points earning credit card to earn points on every payment. Card products referred to are not issued by Qantas but by the relevant Card partners. The applicable Card Partner is the credit provider and credit licensee under the National Consumer Credit laws. Points are offered by the relevant Card partner and partner reward program and can only be earned on eligible purchases. Contact the relevant Card Partner for terms and conditions or enquiries. Bank issued points earned by using your credit card are estimated to be 1 Qantas Point or alternative credit card reward point per dollar spent. Credit card reward points are subject to the terms of your credit card and linked rewards program. Qantas Points quoted are accurate as at 1 August 2017 but may vary at the time of booking. Classic Flight Rewards are available on Qantas, Jetstar and partner airlines. Classic Flight Reward seats are subject to capacity controls, availability is limited and some flights may not have any Classic Flight Rewards available. Taxes, fees and carrier charges are payable by an Accepted Payment Card in addition to the points required on Classic Flight Rewards. These are quoted at the time of booking and are subject to change. See Classic Flight Rewards for more details.