Highlights

  • Set against the roughly $21 billion being pre-filled, that is close to 5% of the total.
  • The ATO also estimates that around $25 billion in tax is lost to the shadow economy each year, a figure that covers far more than contractor payments.
  • ATO Assistant Commissioner Tony Goding said: "Pre-fill is designed to make it easier to do the right thing, but it is not a complete record of all business income."
  • He also said: "Leaving income out of your tax return doesn't make it invisible to the ATO."

TPAR data comes from businesses in specified industries that pay contractors, and shows how much they paid to each contractor over the financial year. The ATO says about $21 billion of these payments will now flow into the returns of around 700,000 sole traders and individuals in business. security, investigation and surveillance

Why the ATO is doing it

At the CPA Tax Forum on 20 August, Commissioner Rob Heferen said self-preparers may save "up to 30 minutes" and tax agents "up to 22%" of their preparation time. For contractors who previously had to total invoices from multiple payers by hand, the change could reduce the effort involved. It also means the ATO holds the same third-party figures that appear in the return.

Pre-fill is a starting point, not the full picture

Income from customers who do not lodge a TPAR, such as private households, will not appear. That is the point of Mr Goding's warning. A contractor who relies only on the pre-filled number could under-report income if part of their work comes from private clients or businesses outside the TPAR system. The ATO noted that TPAR reports were due on 28 August and recommended that contractors lodge their own returns after that date. Contractors who lodged earlier in the season may therefore have done so before all payer reports were in. Where income was left out, an amendment is the usual way to correct a return. Pre-fill is also limited to income. It does not tell the ATO, or the contractor, what business expenses were incurred, so records of costs remain the contractor's responsibility.

Hypothetical example: when the numbers don't match

Hypothetical example: Dana runs a cleaning business as a sole trader. Three commercial clients report payments to her totalling $60,000 through TPAR, and that figure appears in her pre-filled 2025–26 return. Dana also does private home cleaning, paid in cash, which totals $8,000 for the year. Private householders do not lodge TPARs, so that income is not pre-filled. Her assessable business income from these sources is $60,000 + $8,000 = $68,000, not the $60,000 shown in pre-fill. Lodging on the basis of the pre-filled amount alone would omit $8,000. If Dana's marginal tax rate were 30%, an assumption that depends on her expenses and other income, that omission would understate her tax by about $2,400 ($8,000 × 30%), before the Medicare levy and any penalties or interest. Deductible business expenses would then be taken into account in working out her taxable income. The figures in this example are invented for illustration and assume no other income.

When your records and pre-fill differ

Contractors who keep accrual-based records may find the pre-filled amount does not match their books. The ATO says that if a contractor changes a pre-filled amount, they should give a reason and keep evidence to support the change. The pre-fill is not binding, but departures from it need to be explainable.