What is the Taxable Payments Reporting System (CIS)?

The Taxable Payments Reporting System (CIS) is a tax scheme that requires contractors to deduct tax from payments made to subcontractors. The amount deducted depends on the subcontractor's registration status: 10% for registered, 30% for unregistered, or 0% for gross payment status.

What are the different TPRS withholding rates?

There are three TPRS withholding rates: 10% for registered CIS subcontractors with a valid UTR, 30% for unregistered subcontractors or those without valid registration, and 0% for subcontractors with gross payment status.

Who needs to register for CIS?

Contractors operating in construction must register for CIS. Subcontractors must also register if they want to claim the 10% rate instead of the higher 30% rate. Only contractors need to register; subcontractors registration is optional but recommended.

How does CIS relate to GST Reverse Charge?

CIS and GST Reverse Charge are separate rules. CIS applies to all construction payments, while GST Reverse Charge applies when invoices meet specific criteria. In some cases, both can apply to the same transaction. Always consult guidance for your specific circumstances.

What materials are deductible from gross payments in CIS?

Materials supplied by the contractor (labour only) are fully deductible from the gross payment before CIS calculation. However, materials supplied by the subcontractor are typically not deductible, and the full gross amount is subject to TPRS withholding.

TPAR Helper Australia 2026 | Contractor Reporting Made Simple

There is no CIS in Australia

In the UK, principal contractors withhold 20% (or 30% if unregistered) from sub-contractor payments under the Construction Industry Scheme. Australia has no equivalent withholding obligation. Contractors invoice in full, and the principal pays the full invoice (including GST if registered).

What Australia does have is a reporting obligation: businesses primarily in certain industries must lodge an annual TPAR listing all payments to contractors during the financial year (1 July to 30 June).

Industries that must lodge a TPAR

If your business primarily operates in any of these and pays contractors for relevant services, you must lodge a TPAR by 28 August each year:

Building and construction services (since 1 July 2012)
Cleaning services (since 1 July 2018)
Courier and road freight services (since 1 July 2018 / 2019)
Information technology (IT) services (since 1 July 2019)
Security, investigation and surveillance services (since 1 July 2019)
Government entities reporting payments for services

If less than 10% of your business income comes from one of these services, the TPAR obligation may not apply. Check the ATO's TPAR self-help tool.

What goes on the TPAR

For each contractor you pay during the year, you must report:

Their ABN (Australian Business Number)
Their name and address
The gross amount paid for the financial year (including GST)
The GST component of those payments
(Optional) Tax withheld, if you withheld under the no-ABN rule (47% if no ABN was supplied)

Worked Example

Scenario: A bricklayer (GST-registered) invoices you $11,000 for the year (10 invoices × $1,100).

Gross paid (TPAR Box 1): $11,000

GST included (TPAR Box 2): $11,000 ÷ 11 = $1,000

Net to bricklayer: $10,000 — pay the full $11,000 (no withholding) and report the totals on TPAR by 28 August.

No-ABN withholding (the only AU "withholding" near a CIS analogue)

If a contractor invoices you for over $75 (excluding GST) and doesn't quote an ABN, the ATO requires you to withhold 47% (top marginal rate plus Medicare) from the payment and remit it via your BAS (W4 label). This is the closest mechanism to UK CIS in Australian tax law — but it only applies when no ABN is supplied. Once a contractor gives you a valid ABN, you pay them in full.

How to lodge the TPAR

Keep contractor invoice records throughout the year (ABN, name, gross paid, GST included).
From 1 July, prepare your TPAR using accounting software (Xero, MYOB, QuickBooks all auto-generate it) or the ATO's online portal.
Submit through Online Services for Business (myGovID + RAM) or via your registered tax/BAS agent.
Deadline: 28 August for the financial year that just ended (1 July – 30 June).

Frequently Asked Questions

Does Australia have a CIS-style withholding tax?

No. There is no equivalent of the UK Construction Industry Scheme. Pay your contractors in full; report annually via TPAR.

When is the TPAR due?

28 August each year, covering the financial year that just ended (1 July to 30 June).

What's the penalty for late TPAR lodgement?

Up to $330 per 28 days late, capped at $1,650. Repeated non-lodgement can trigger an audit.

When must I withhold tax from a contractor?

Only when a contractor invoices over $75 (ex GST) without quoting a valid ABN. You must then withhold 47% and remit via your BAS (W4 label).

Do labour-hire firms have separate TPAR rules?

Yes. Labour-hire arrangements have their own PAYG withholding rules. Talk to a registered tax agent if your business uses labour hire.

Related Tools & Resources

Explore more GST tools and guides:

Reverse Charge Construction Guide Reverse GST Calculator Income Tax Calculator Small Business GST Guide Australian GST Rates

Official Australian tax resources:

ATO – Taxable Payments Reporting ATO – Contractors Guide

TPAR Reporting Helper