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 – 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 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 [emailprotected]. 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.
Use your Qantas Points earning credit card each time you do a grocery shop, fill the car with petrol, pay utility bills or shop online - and watch the points add up.Can I pay my income tax bill by credit card? ›
You can pay online. There's a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable. There's no fee if you pay by personal debit card.Can I earn Qantas points on ATO payments? ›
Some bill payment services even give you bonus points, on top of any points earned through your credit card. For example, you can also earn 1 Qantas point per $7 paid to the ATO through B2Bpay if you're a Qantas Business Rewards member.Can you pay tax with credit card Australia? ›
Other payment options
The easiest way to pay is with BPAY or a credit or debit card.
Yes, you can pay most bills with a credit card for points and many credit cards will earn you rewards for doing so. Expenses such as utilities, rent, medical bills and taxes are some of the opportunities to pay for bills with a credit card for points.What is the fastest way to earn Qantas Frequent Flyer points? ›
- Enroll in Qantas Frequent Flyer.
- Book Flights on Qantas or Jetstar.
- Oneworld Alliance Flights.
- Other Domestic and International Partners.
- Minimum Points Guarantee.
- Cabin Bonus Points.
- Reach a Higher Membership Tier.
- Earn Qantas Green Status.
Bottom line. Paying taxes with your credit card isn't recommended, as it comes with processing fees and the possibility of paying interest if you can't pay off the balance right away.Can you use credit card to pay ATO? ›
BPAY or a credit or debit card are the fastest, easiest ways to pay the ATO. You can also use our online services to make a payment.Is paying ATO with credit card a cash advance? ›
Your BAS and PAYG payments are considered a bill meaning the payment shouldn't be treated as a cash advance. Hi @KLJ, Your BAS and PAYG payments are considered a bill meaning the payment shouldn't be treated as a cash advance.Do I have to pay tax on credit card rewards? ›
If earned through the use of the card, like a cash-back bonus, the rewards are viewed by the IRS as a rebate and not taxable income. Rewards provided as an incentive just for opening an account (without you spending any money) could be considered taxable income.
We value that haul at roughly $5,400.00, which is quite significant!How can I avoid paying taxes on my credit card? ›
Take advantage of 0% balance transfer APR offers
By making a balance transfer through a credit card with a 0% introductory rate to pay taxes, the tax payment is deferred for the duration of the introductory APR. Essentially, the cash can be used to pay taxes without incurring a convenience fee.
Because card providers can still charge merchants for accepting card payments, merchants, including HMRC, have to absorb those costs themselves. Rather than charging those fees back to taxpayers via the public purse, it chose to ban personal credit card payments altogether.How much can you earn before you pay tax in Australia? ›
For Australian residents the tax-free threshold is currently $18,200, meaning the first $18,200 of your income is tax free, but you are taxed progressively on income above that amount. The tax-free schedule is due to stay at $18,200 until at least 2024–25.Does paying bills with credit card count as purchase? ›
In most cases, yes. Always check with the company that issues the credit card to be sure. However, most cards view bill payments as transactions. With rewards cards, you can earn points or cash back based on these transactions, as well.Is it OK to pay bills with a credit card? ›
Having your monthly bills paid with your credit card automatically can be an excellent use of your access to credit, because it ensures that you're paying your bills on time, and possibly earning reward points in the process.Can you pay off a credit card with another credit card to get points? ›
Can I earn points by paying a credit card with another credit card? Since balance transfers and cash advances aren't considered qualifying purchases, credit card issuers don't mark them as points eligible activities.Can you still earn Qantas points with Woolworths? ›
Earn Qantas Points with Everyday Rewards
It's one of the easiest ways to earn Qantas Points on the ground. Whether it's your weekly groceries from Woolworths, everyday essentials from BIG W or drinks from BWS, simply shop and scan and every shop is a step closer to your next holiday.
Get 55,000 bonus Qantas Points when you spend $3,000 in the first 3 months. Plus, a yearly $450 Travel Credit. ABN holders w/ $75,000 revenue. Get 100,000 bonus Qantas Points when you spend $3,000 in the first 2 months.Is it worth becoming a Qantas frequent flyer? ›
Is it worth getting Qantas Frequent Flyer? Absolutely. If you can sign-up for free and earn points through flying or one of Qantas' many partners, then it's worth becoming a member. Points can be used for Business Class flights and more.
Credit cards are safer to carry than cash and offer stronger fraud protections than debit. You can earn significant rewards without changing your spending habits. It's easier to track your spending. Responsible credit card use is one of the easiest and fastest ways to build credit.What are the pros and cons of paying by credit cards? ›
- Pro: They're a Great Way to Build Credit. ...
- Con: High Cost of Borrowing. ...
- Pro: They're More Secure Than Cash. ...
- Con: It's Easy to Dig Yourself into a Hole. ...
- Pro: Rewards Points. ...
- Con: Applying for Too Many Credit Cards Can Damage Your Credit.
The ATO can, and will, check your bank accounts, cross reference payments against an ABN and confirm missing income from your tax return.Does ATO charge credit card fees? ›
Card payment fee.
|MasterCard – Domestic Debit||0.20%|
|MasterCard – Domestic Credit||0.77%|
|Visa – International||1.99%|
|Visa – Domestic Debit||0.40%|
Use your Mastercard® credit or debit card to pay federal and state* income taxes online or by phone.Why it is not wise to use credit card for a cash advance? ›
People who take out cash advances are more likely to default on their credit card debt than people who do not. That's part of the reason that interest rates on cash advances are higher. It could also make you more at risk of falling behind on your credit card payments.Is it good to use credit card for cash advance? ›
Cash advances often come with a higher APR than any purchases you make with the same credit card. According to the Federal Deposit Insurance Corporation, the APR could be twice as high. Plus, most credit cards don't offer a grace period on cash advances.Is paying taxes considered a cash advance? ›
While the tax payment itself will not be considered a cash advance, the fee – charged separately – is erroneously being considered as a cash advance. You'll get hit with a cash advance fee and begin paying interest immediately.Is a reward tax free? ›
Such gifts, prizes and awards are reportable as taxable compensation to the employee, subject to appropriate federal, state and employment tax withholding, and must be included in the employee's year-end Form W-2, Wage and Tax Statement.Does paying points help with taxes? ›
Points are prepaid interest and may be deductible as home mortgage interest, if you itemize deductions on Schedule A (Form 1040), Itemized Deductions. If you can deduct all of the interest on your mortgage, you may be able to deduct all of the points paid on the mortgage.
Qantas members with over one million points in their account are now being invited to spend their haul on just about any product – including luxury goods, watches, sports equipment or even a car. Points Club Plus members are also eligible.What do 1000000 Qantas points get you? ›
You could enjoy more than 100 trips on shorter flights with 1 million Qantas Points.How much is 120k Qantas points worth? ›
Snag up to 24 business class upgrades
If you wanted to maximise your points and enjoy as many comfortable journeys as possible – rather than just one or two long-range flights – 120,000 Qantas Points can give you as many as 22 one-way upgrades from economy to business class on short domestic flights.
- Invest in Municipal Bonds. ...
- Shoot for Long-Term Capital Gains. ...
- Start a Business. ...
- Max out Retirement Accounts and Employee Benefits. ...
- Use a Health Savings Account (HSA) ...
- Claim Tax Credits.
If you make $45,000 a year living in Australia, you will be taxed $5,992. That means that your net pay will be $39,008 per year, or $3,251 per month. Your average tax rate is 13.3% and your marginal tax rate is 34.5%. This marginal tax rate means that your immediate additional income will be taxed at this rate.How much tax do I pay on $80000 in Australia? ›
If you make $80,000 a year living in Australia, you will be taxed $18,067. That means that your net pay will be $61,933 per year, or $5,161 per month. Your average tax rate is 22.6% and your marginal tax rate is 34.5%.How much can a retired person earn without paying taxes in 2022? ›
In 2022, this limit on your earnings is $51,960.
The special rule lets us pay a full Social Security benefit for any whole month we consider you retired, regardless of your yearly earnings.
Some suppliers don't accept credit card as payments, but program partner B2Bpay can solve this problem by essentially turning your credit card payments into an EFT (electronic funds transfer) or BPAY payment to the biller so you can still earn Qantas Points on your spend.Can I get Qantas points from AGL bills? ›
To do that, login to My Account and sign up to Direct Debit using your bank account, Paypal or credit card. You will also earn 1 flybuys point per $1 spent ongoing on AGL gas and/or electricity bills (although this gets halved if you still get paper bills instead of electronic).Do you get points for paying bills with Amex? ›
Will I earn rewards for bills I pay with my Card? Yes. As long as you are enrolled in a reward program and are using an eligible Card, you can earn points, miles, or cash back for virtually every dollar billed.
Log in to your AfterPay account on the website or app. Navigate to 'My Account' at the top-right corner (website), or 'Profile' at the bottom right corner (app). Click on 'Link Account', then enter your Qantas Frequent Flyer number in the field. You will receive Qantas Points up to 45 days after each purchase.Does BPAY count towards credit card points? ›
Transactions that are processed as cash advances or made through BPAY or over the counter at a bank are ineligible for earning points.Is it worth converting Woolworths points to Qantas? ›
You can get much higher value out of your Everyday Rewards points if you transfer them to Qantas Frequent Flyer and put them towards a reward flight. The current transfer rate is 2,000 EDR points to 1,000 Qantas Points.Do you still earn Qantas points at Woolworths? ›
Where can I collect Everyday Rewards points? You'll collect a minimum of 1 point for every* dollar you spend in-store and online at Woolworths, BWS, BIG W, participating Caltex and Caltex Woolworths/EG (operated by Euro Garages Australia)+. Plus collect a bunch more with points boosters.Can you earn Qantas points at Coles? ›
Coles Flybuys and Everyday Rewards both give you a way to earn points when you shop at the supermarket and with program partners. They also allow you to get frequent flyer points for your spending, as you can transfer Flybuys points to Velocity Points or Everyday Rewards points to Qantas Points.Is it better to pay your bills with a credit card? ›
Be aware of any convenience fees you'll incur by paying your bills with credit cards. It's best to use credit only for products and services that won't charge a fee, and using cash, debit or bank transfer for the rest. And, of course, use a credit card only if you know you can pay off the balance each month.What bills can be paid by credit card? ›
The short answer is, entertainment and nonessentials can usually be paid with a credit card with no fees. Services, utilities, and taxes, can often be paid with a credit card but with a processing fee. Loan payments, are usually check or bank withdrawal payment only.How much are 90000 Qantas points worth? ›
|Purchase||Qantas Points||Value/1,000 points|
|Melbourne to Brisbane (Business) return||48,000||$25.00|
|Sydney to Perth return, upgrade from Economy to Business (2018)||50,000||$41.30|
|Sydney to Los Angeles return (Economy)||90,000||$16.70|
|Sydney to Los Angeles return (Premium Economy)||144,000||$35.40|
Qantas Frequent Flyer is Australia's leading airline loyalty program, and it's definitely worthwhile holding membership. Members have the ability to earn Qantas points and redeem them for fantastic rewards. Those who fly frequently also gain the ability to earn Status Credits.How many Qantas points can you earn in a year? ›
Excludes any Government rebate amounts applied to reduce the cost of the premium. You can also earn up to 20,000 Qantas Points in a year through the Qantas Wellbeing App.