The ATO will stop taking credit card payments after 30 November 2026 and I reckon it’s a dumb move. At the very least, the timing for such a m Ove is off.
For small businesses that sometimes use a credit card to pay tax when cash is tight, that is one less option.
Debit cards will still be accepted. That changes how you pay, not what you pay from. A debit card uses money already in the account. A credit card buys you time.
Think about a newsagency in the lead-up to Christmas. Stock has to be bought in October and November. Rent, wages, supplier accounts and tax can all fall due before the Christmas sales arrive. For some retailers, a credit card has covered that gap for a few weeks.
I am not arguing that credit cards fix an underfunded business. They don’t. They cost money. Anyone using one to pay tax needs to know the fees and have a realistic plan to clear the balance.
But many retailers who pay the ATO by card are not in trouble. Their problem is timing. Taking the card away does not bring Christmas sales forward. It does not push the rent back either.
The ATO says the decision follows the RBA’s review of surcharging. It says the community should not carry credit card merchant fees. I accept there is a public cost. I would like to see the same weight given to the cost for businesses that relied on this option.
If you have a payment plan linked to a credit card, act now. Change the payment method before your first instalment due after 30 November. If you don’t, payments may fail and the plan could fall into arrears or default Review your cash-flow forecast for the months ahead and talk to your accountant.
The ATO should reconsider. At the very least, it should offer a practical transition that deals with the funding gap. The tax still has to be paid. Retailers have just lost one of the ways to pay it on time.
Let’s look at 2026 so far: award wages up 5%, rent up 5%, payments surcharge removed at a cost to business of 1%, utilities up 5% and more, insurance up by around 10%. It’s challenging. For some, being able to pay tax by card meant they had more time to manage their cash position.