The surcharge ban has reached the tax office. On Thursday, the first day of the ban, the Australian Taxation Office said it will stop accepting credit card payments after 30 November.
What's happening?
Until now, tax paid by credit card carried a surcharge of between 0.94 per cent and 2.03 per cent, which covered the tax office's cost of accepting the card. From 1 October, those charges can no longer be passed on, and the ATO has decided it will not absorb them itself.
“As a government agency, the ATO has decided it would not be appropriate for the cost of credit card merchant fees to be transferred to the community,” it said on Thursday.
Taxpayers with a payment plan or a direct debit linked to a credit card are being written to, and the ATO says those arrangements need updating before the first instalment due after 30 November.
Who it affects
Not many people, on the ATO's own numbers. Credit cards accounted for 2.3 per cent of tax payments in 2024–25, and about six in ten of those payments came from wealthy individuals or large organisations. The ATO says other payment methods remain available.
Even so, the announcement landed on the ban's first day, and business groups are unhappy about the timing. Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the decision was “utter hypocrisy” from a government agency that refuses to absorb card costs “while many small businesses have little choice but to absorb them”. He estimates card fees can cost cafés and restaurants up to $50,000 a year, and a medium-sized pub up to $100,000.
The ATO says it recognises the change may be disruptive: “We know changing a payment method you rely on may take time and could make managing your cash flow harder,” it said.
What it means for you
If you pay tax by credit card — whether that was to collect points or to use the card's interest-free period — that option ends on 30 November. If an ATO direct debit or payment plan is linked to a credit card, update it before your first due date after that.
On the government's side, Treasurer Jim Chalmers says the surcharge reforms save consumers $1.6 billion a year and businesses $910 million. The ATO's own reasoning is narrower: it did not want the cost of a payment method used by a small minority spread across everyone else.
The card surcharge is gone, but other charges are not — weekend, public holiday, booking and service fees all still apply. Our guide to the card surcharge ban has the full list.
Happy tax time! G