Around 700,000 sole traders and individuals in business are opening their 2025–26 tax returns to find contractor income already filled in. For the first time, payments reported by businesses through the Taxable Payments Annual Report (TPAR) are pre-filling as business income in eligible individual returns.

The Australian Taxation Office (ATO) says about $21 billion in contractor payments is covered. It also estimates that around $1 billion in TPAR payments may be left out or under-reported this year, making the change relevant to both return preparation and income reporting compliance.

What TPAR is and why it now appears in returns

The TPAR is an annual report lodged by businesses that pay contractors in certain industries. It identifies the contractors paid, their Australian Business Numbers (ABNs) and the payments made during the financial year.

The pre-fill applies to contractors working in building and construction, courier and road freight, cleaning, information technology, and security, investigation or surveillance services.

Previously, the ATO primarily used this information to compare reported payments with tax returns after lodgment. From Tax Time 2026, the figures appear in myTax and tax agent pre-fill reports, allowing eligible contractors to review the information before submitting their returns.

The pre-filled amounts are placed in the relevant business income labels with GST excluded. Government grants reported through TPAR, business details such as ABN and address, and opening stock from the previous year can also pre-fill.

Why the TPAR lodgment deadline matters

Businesses had until 28 August to lodge their TPAR for 2025–26. Payments cannot appear in a contractor’s pre-fill information until the payer submits its report and the information becomes available.

The timing means contractors preparing returns before the reporting deadline may not have access to all reported payments. Late reports can also result in additional information becoming available after the deadline.

A contractor who lodged early may subsequently find that the ATO’s records contain payments that were not included in the submitted return. Comparing those records with invoices, bank statements and other business records can help identify differences.

Pre-fill does not show every source of income

Pre-fill reflects the information reported by paying businesses. It does not provide a complete record of every contractor’s business income.

Income from cash jobs, private households and clients that are not required to lodge a TPAR may not appear. Those amounts still need to be considered when preparing the return.

Contractors therefore need to reconcile pre-filled information with their own records. Differences should be examined rather than assuming either the pre-filled amount or the business records are automatically correct.

If a contractor changes a pre-filled amount, the ATO requires a short reason code explaining the adjustment. This records why the reported amount was changed and provides information that the ATO can review.

A worked example of income outside pre-fill

Consider a hypothetical courier contractor registered for GST who works for three freight businesses and also undertakes private deliveries.

The freight businesses report total payments of $66,000, including GST, through their TPARs. With GST excluded, the pre-filled business income amount would be $60,000.

The contractor also earns $5,000, excluding GST, from private customers. That income does not appear in the pre-filled amount.

Assuming these amounts all belong in the same reporting period, the total business income in this example is $65,000. Accepting the $60,000 pre-filled figure without checking other records would leave $5,000 of income unreported.

Deductions, including eligible fuel, vehicle and phone expenses, are not established by TPAR pre-fill. Separate records remain necessary to support any amounts claimed.

How the ATO uses reported payment information

Pre-fill also supports the ATO’s compliance activities. The ATO can compare income declared in a contractor’s return with payments reported by businesses.

Where declared income is lower than the reported payments, or a pre-filled amount has been reduced, the difference may require further examination. A mismatch does not automatically establish that income has been omitted, because the underlying records and circumstances still need to be assessed.

Data matching does not automatically result in an audit. The ATO may contact taxpayers to ask them to review their information and correct errors where necessary.

Pre-fill can also reduce transcription mistakes and help contractors identify payments they may have overlooked, particularly when working for several businesses during the year.

What to check before the October deadline

For individuals lodging their own 2025–26 returns, the usual deadline is 31 October. Eligible taxpayers using a registered tax agent may have later due dates under the agent’s lodgment program.

Contractors who submitted returns before all TPAR information became available can compare subsequently reported payments with the income they declared. Any differences need to be checked against their business records before determining whether a correction is required.

Messages from the ATO may also identify discrepancies between declared income and payments reported by businesses. Keeping invoices, payment records and explanations for adjustments accessible can help contractors respond accurately.