ATO to stop accepting credit cards as payment method after 30 November 2026

The Australian Tax Office (ATO) has announced it will stop accepting credit cards as a payment method after 30 November 2026.

The move follows after the Reserve Bank of Australia’s (RBA) Review of Merchant Card Payment Costs and Surcharging, where the RBA concluded that “it is in the public interest” to scrap surcharging for all designated card networks from 1 October 2026 (including EFTPOS, Mastercard, and Visa).

It said that 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.

The ATO recognises that some taxpayers currently rely on credit card payments to manage their tax payments and understands this change may require some adjustments.  The ATO is writing directly to those who currently have a payment plan linked to a credit card to explain the changes and outlining the steps they need to take.

There are alternative payment options available for taxpayers, including direct deposit, direct debit from a debit card, direct debit from an Australian cheque or savings account, Government EasyPay, in person at Australia Post, by mail, or international money remitter.

The ATO said it is committed to helping taxpayers transition to alternative payment methods and will continue to support those experiencing financial hardship or other circumstances that make it difficult to meet their obligations.

Alternative payment options for taxpayers are outlined at www.ato.gov.au/howtopay

Taxpayers who need extra support are encouraged to visit www.ato.gov.au/supporttolodgeandpay, contact the ATO on 13 11 42 during business hours or speak with their registered tax professional.

ATO focus on taxpayers who vary their PAYG instalments

The ATO is writing to taxpayers who have varied their PAYG instalments to nil over multiple years, reminding them that the general interest charge (GIC) may apply where their instalments have been significantly understated.



Where varied instalments are less than 85% of the total tax payable, the ATO may impose GIC on the difference and, depending on the circumstances, penalties may also be applied.

Taxpayers are advised to maintain appropriate records to support their variation decisions, and review variations where circumstances change.

FBT changes for salary sacrificed work-related benefits

From 1 April 2027, employers will no longer be able to use the ‘otherwise deductible rule’ to reduce the taxable value of an expense payment fringe benefit provided to an employee where the expense is:

• work-related;
• covered by the new $1,000 standard deduction; and
• provided under a salary sacrifice arrangement.

This includes where an employer pays for, or reimburses, work-related expenses, such as home office expenses, home phone or internet expenses, or self-education expenses.

However, the otherwise deductible rule can continue to apply where the expense is:

• not covered by the standard deduction; or
• covered by the standard deduction but the benefit is not provided under a salary sacrifice arrangement.

Further, from 1 April 2027, certain work-related items will no longer qualify for the FBT exemption where they are provided under a salary sacrifice arrangement. These include:

• portable electronic devices;
• computer software;
• protective clothing; and
• briefcases and tools of trade.

Eligible work-related items may still qualify for the exemption where they are not provided under a salary sacrifice arrangement.

Further, under the changes, employers may be able to provide an employee with more than one eligible work-related item in an FBT year, even where the items have the same or substantially identical function, and continue to receive the exemption where the items:

• are mainly used for work purposes; and
• are not provided under a salary sacrifice arrangement.

This repeals the general 'one-item' restriction applying to this work-related item exemption from 1 April 2027.

ATO busts common myths under the cents per kilometre method

The ATO has highlighted several misconceptions that commonly lead to incorrect claims under the cents per kilometre method for claiming deductions for car expenses. Common errors include:

• Claiming travel between home and work, which is generally private and non-deductible;
• Automatically claiming 5,000 kilometres without the appropriate records (for example, being unable to show how the business kilometres were worked out);
• Claiming car expenses for a vehicle provided under a novated lease through a salary sacrifice arrangement;
• Separately claiming the decline in value of a car and other expenses when using the cents per kilometre method; and
• Using both the cents per kilometre and logbook methods for different periods during the income year.

$20,000 instant asset write-off made permanent

From 1 July 2026, the $20,000 instant asset write-off has been made permanent for small businesses.

Businesses with an aggregated turnover of less than $10 million may be able to claim an immediate deduction for the business portion of an eligible depreciating asset costing less than $20,000 in the year the asset is first used or installed ready for use.

Loss carry back is now law

The re-introduced ‘loss carry back’ measure has also now become law, applying to income years starting on or after 1 July 2026.

Where eligible, companies will broadly be able to carry back a tax loss (revenue in nature) and apply it against tax paid in either, or both, of the previous two income years, basically giving rise to a tax refund for the loss year.

More Australians making use of downsizer contributions

The ATO has reported that around 123,000 individuals have made 'downsizer super contributions' since the scheme commenced in 2018, contributing more than $31 billion to super funds.



Broadly, where the various requirements are satisfied, eligible individuals aged 55 years or older can contribute up to $300,000 from the sale of their home into super. Eligible couples may be able to contribute up to $600,000 combined.

ATO extends data-matching programs

The ATO is continuing its visa data-matching program, acquiring data from the Department of Home Affairs from the 2027 to the 2029 income years. Under this program, the data collected may include:

• address and contact history for visa applicants, sponsors and migration agents;
• histories of visas granted, including visa subclasses;
• an individual’s visa status at a point in time;
• details of migration agents, sponsors and education providers; and
• international travel movements undertaken by visa holders (arrivals and departures).

Data relating to around 9 million individuals is expected to be collected under this program each financial year.

The ATO is also continuing its passenger movements data-matching program for the same period.

Under this program, the data collected by the ATO may include names, dates of birth, arrival and departure dates, passport information and status types (including visa status, residency and citizenship status).

With travel records under the microscope, how could this impact your tax residency status?

If you spend time outside Australia for work, family or personal reasons, your travel history could become increasingly important when it comes to your Australian tax affairs.

On 24 August 2026, the ATO gazetted its latest passenger movements data-matching program (per the article immediately above). Under the program, the Department of Home Affairs is expected to provide the ATO with travel information for around 115,000 individuals each year from the 2026–27 income year through to 2028–29.

The information may include an individual's name, date of birth, arrival and departure dates, passport details and citizenship or visa status. The ATO can then compare this information with its own records to identify potential issues with tax residency, registration, lodgement, reporting and payment obligations.

For taxpayers who regularly travel overseas, one of the most important areas to consider is their tax residency position.

Why tax residency matters

Your Australian tax residency status can have a significant impact on how you are taxed.

For example, Australian residents are generally taxed on their worldwide income, while foreign residents are generally taxed only on their Australian-sourced income. Residency can also affect the tax-free threshold, Medicare levy obligations and capital gains tax (CGT) outcomes.

This means that where you have moved to or from Australia, or spent extended periods overseas, the exact dates you entered and left Australia can be important when preparing your tax return.

The ATO will now have access to passenger movement information from an independent government source. If the dates reported by a taxpayer do not appear to align with those records, this could potentially prompt the ATO to seek further information.

Importantly, spending time overseas does not automatically make someone a foreign resident for tax purposes. Tax residency is determined by considering a range of factors, including family circumstances, the strength of connections with Australia and someone’s intentions and behaviour. However, accurate travel records can be an important part of establishing the overall position.

When could your travel history matter?

There are several situations where keeping accurate travel records could be particularly useful.

Part-year residency

If you became or ceased to be an Australian tax resident during the year, the dates you arrived in or departed Australia may form part of the evidence supporting your residency position. They can also be relevant when determining whether a part-year tax-free threshold applies.

Working overseas

If you regularly travel overseas for work, your travel history may help establish when you were working in Australia and when you were overseas. This can be particularly relevant where your tax position involves foreign employment income, work-related travel or other overseas activities.

Selling an Australian property

If you have moved overseas and later sell an Australian property, your residency history can be relevant to the CGT treatment. An individual’s tax residency status can have a significant impact on whether the main residence exemption can apply on sale of someone’s home, so keeping a clear record of when you were living in Australia and when you were overseas can be helpful.

What should you do?

There is no need to be concerned simply because you travel overseas. However, if you spend significant periods outside Australia, it is worth making sure your records are accurate and consistent.

As a practical starting point:

• Keep a record of your arrival and departure dates for each trip, including the year in which the travel occurred.
• Retain useful supporting records such as flight itineraries, boarding passes and passport records where available.
• Let us know about significant periods spent overseas, particularly if you have moved overseas or are considering doing so.
• Before lodging your tax return, check that the dates used in any residency calculation or other relevant tax treatment are accurate.

Good record-keeping is particularly important where your residency position is not straightforward. If there is a difference between the dates you have reported and the information available to the ATO, having supporting records can make it much easier to explain the position.

A small detail that could make a big difference

For most taxpayers, the ATO's passenger movements data-matching program is unlikely to have any direct impact. However, for people who regularly travel overseas, have moved countries or have a residency position that is finely balanced, accurate travel records could become increasingly valuable.

A few minutes spent checking your travel dates and residency position could help avoid unnecessary questions later and provide greater confidence that your tax return accurately reflects your circumstances.

The “widow tax” caused by Budget changes has now been fixed

Federal Parliament has closed an unintended loophole in the recent negative gearing and capital gains tax reforms that became widely known as the “widow tax”. At the same time, the Government also fixed a technical issue that could have affected people who first use a main residence to generate rental income after Budget night on 12 May 2026.

What the problem was

As you might be aware, the tax rules have recently been changed to ensure that losses generated from residential rental properties from 1 July 2027 can be ‘quarantined’. This means that they can only be offset against income or capital gains generated from other residential rental properties. However, the changes won’t generally apply to properties that were purchased by the relevant taxpayer before 12 May 2026.

However, a problem could arise when an ownership interest in a property passes to someone as a result of the death of the original owner or because of a relationship breakdown and this occurs after 12 May 2026.

Under the original version of the new rules, that transfer could be treated as a new acquisition. This could have meant that a surviving spouse or former partner risked losing the protected negative gearing treatment that had applied to the property in the hands of the previous owner.

How it was fixed

The Government moved quickly once the issue was identified. Some new rules now specifically protect people who acquire a residential property interest from a spouse because of death or relationship breakdown.

The rules can also potentially protect someone who inherits an additional ownership interest in a rental property from a co-owner who isn’t their spouse.

Former main residences

A related technical issue also needed fixing. Under the original rules there was a risk that an existing main residence purchased before 12 May 2026 could lose its protected status if it was later first used to generate taxable rental income after that date. This was because of the interaction with a long-standing tax rule that can treat someone as if they had reacquired a former main residence when it is first used to produce income.

The Government has now passed legislation to correct this. The new rules specifically disregard that “first use to produce income” rule when determining the acquisition date for negative gearing purposes.

Why these fixes matter

Both changes remove sources of unexpected cash-flow disruption. The “widow tax” fix protects people at a difficult personal time. The main residence clarification gives homeowners greater flexibility if their circumstances change and they later decide to rent out a property they already own.