Sunita Somvanshi
New Australian rules restricting card payment surcharges took effect on October 1. Now the Australian Taxation Office has announced it will stop accepting direct credit card payments entirely after November 30, 2026. For small businesses absorbing one change, a second arrives before they’ve adjusted to the first.
The ATO’s decision means that taxpayers who currently pay BAS, income tax, and other liabilities directly to the ATO by credit card must switch to an accepted alternative payment method before November 30. The ATO confirmed the change, stating that it does not consider it appropriate to transfer merchant fee costs to the community — and that with surcharging no longer available under the new payment rules, removing the credit card option is its response. The change takes effect for payments made after November 30, 2026.
The timing has drawn direct criticism from small business groups. Some businesses have relied on credit cards to defer the cash outflow on tax liabilities until the card statement was due. Without that option, businesses will need to plan for the cash outflow at the time of payment or establish a formal ATO payment arrangement in advance. News.com.au reports that small business representatives have described the timing as an additional pressure on operators already adjusting to the surcharge ban.
What changed on October 1, and why the ATO’s move sits on top of it
Karmactive reported on Australia's [card surcharge ban](https://www.karmactive.com/australia-card-surcharge-ban-october-2026/) before it took effect. The new Australian rules restricting card payment surcharges took effect October 1. The RBA's surcharging standards and the ACCC's consumer-law enforcement framework have separate roles in that system; businesses that previously added a surcharge at checkout for card payments can no longer do so for Visa, Mastercard, American Express and eftpos transactions.
The practical effect is that businesses are now absorbing merchant processing fees directly into their pricing. The ATO’s separate November 30 move applies that same logic to tax payments — rather than absorb the processing fee on incoming credit card tax payments, the ATO is withdrawing the payment method.
A point worth clarifying for hospitality and service businesses: the October 1 reforms concern card-payment surcharges. Other types of business surcharges — such as weekend, public holiday or late-night service charges — are governed separately under Australian consumer law and specific disclosure rules. Whether a particular surcharge is permissible depends on its basis and how it is disclosed, not whether card surcharges have been banned.
For tax payments specifically, the November 30 cutoff is confirmed by the ATO directly. BPAY remains an available payment method for most ATO obligations. The ATO also offers payment plan arrangements for eligible taxpayers; these depend on ATO approval and the type of liability involved, so confirm eligibility through the ATO’s own guidance.
For sole traders and small companies, two actions are needed before November 30: remove any remaining card surcharges from checkout flows in line with the October 1 change, and set up an alternative payment method for any ATO liabilities falling due after that date. The ATO’s own website lists currently accepted payment methods and is the definitive source for which obligations are affected.
When will the ATO stop accepting credit card payments? The ATO will stop processing direct credit card payments after November 30, 2026. The change affects payments made directly to the ATO. BPAY remains available, and payment plans can be arranged subject to ATO eligibility. The ATO’s stated reason is that it does not consider it appropriate to pass merchant processing fees on to the community, and that surcharging is no longer available to offset that cost.
The ATO’s formal announcement is the source to consult for the complete list of affected payment types and any transitional arrangements. Check back as any guidance updates or business group responses are published. For related Australian news this week, see Karmactive’s current coverage.
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