ATO Stops Accepting Credit Cards After 30 June 2027 (Delayed): What It Means for Your Business

Update, 21 October 2026: the ATO had set 30 November 2026 as the last day for credit card payments. On 9 October 2026 the Treasurer delayed that cut-off by 12 months to 30 June 2027, with the government funding the ATO's card fees until then. The figures below are unchanged; only the date has moved. After 30 June 2027 the ATO expects to keep accepting credit cards only through third-party platforms.

By John Pierre Saliba · Last updated 21 October 2026 · OverdraftMe · ACL 511092

• Credit card payments to the ATO end after 30 June 2027 (delayed on 9 October 2026 from the original 30 November 2026).
• General interest charge: 11.51% p.a. for October to December 2026, compounding daily, not tax deductible since 1 July 2025.
• About 2.3% of tax payments were made by card in 2024-25. The small businesses in that group used it for timing, not points.
• Third-party platforms still take cards for about 1.2% to 2.1%. A deductible overdraft under about 15.5% p.a. beats GIC after tax at the 25% company rate.

Does the ATO credit card ban affect me?

Quick check. Find your line.

• You pay BAS, PAYG instalments or income tax by credit card directly to the ATO. Yes. From 1 December 2026 you need another route, and the options are below.
• You have an ATO payment plan or direct debit linked to a credit card. Yes, and it is urgent. Change the payment method to a bank account before your first instalment due after 30 June 2027, or the instalment fails and the plan is at risk.
• You already pay the ATO through a platform such as pay.com.au or B2Bpay. No change. The platform pays the ATO by BPAY or transfer, so the ban does not touch it.
• You pay by BPAY, transfer or direct debit from a bank account. Nothing changes.
• You have never used a card but you lean on the ATO when cash is tight. Indirectly, yes. The general interest charge is 11.51% and no longer deductible, so paying late costs more than it did two years ago, and the card escape hatch other businesses used is closing at the same time.

What is changing, and when?

The sequence matters, because the first change caused the second.

The ATO says about 2.3% of tax payments were made by credit card in 2024-25, and more than 60% of those came from large and wealthy groups. That sounds small. It is not small if you are one of the owner-operators who used the card as a float every quarter.

Why is the ATO doing this?

Until 30 September the ATO charged a card payment fee that covered what the card schemes charged it. From 1 October it cannot, because the RBA has banned surcharging on eftpos, Visa, Mastercard and American Express. Rather than have every taxpayer wear the card costs of the 2.3% who paid by card, it is switching cards off. The two month transition is the ATO giving card users time to set up a replacement. The same ban is why your cafe or trade business can no longer add 1.5% at the terminal, which we cover in what the card surcharge ban means for your business.

Who does this actually hurt?

• The business that pays its quarterly BAS on an Amex on day one of the statement cycle and gets up to 55 days to find the cash. That float is gone.
• Sole traders and contractors with lumpy income who used the card to bridge a tax bill to the next big invoice.
• Anyone whose ATO payment plan direct debits from a credit card. If the method is not updated, the instalment fails and the plan is at risk of cancellation.
• Points collectors. Not a cash flow issue, but the ATO was the single biggest points-earning bill for a lot of small businesses.

If none of that is you, nothing changes. Keep paying by BPAY or transfer.

What does paying late cost instead?

The default alternative for a lot of businesses will be to pay late and set up a payment plan. Know what that costs before it becomes a habit.

• The general interest charge (GIC) for October to December 2026 is 11.51% p.a., up from 10.61% a year earlier. It compounds daily.
• GIC has not been tax deductible since 1 July 2025. Every dollar of it comes out of after-tax profit.
• On a $50,000 bill, 90 days of GIC is about $1,439. A full year is about $6,100.
• A payment plan sits in your ATO account and in your bank statements. Lenders see it. Debts over $100,000 can be reported to credit bureaus if you are not engaging with the ATO.

For the full picture on payment plans, director penalties and how lenders read ATO debt, see ATO tax debt and business overdrafts.

What are my options after 30 November?

1. Pay from cash, with a buffer behind it. Cheapest if you have it. The risk is draining the account three weeks before wages and super are due. See option 4.
2. ATO payment plan. Call 13 11 42 or set it up online. GIC at 11.51% applies the whole time, it is not deductible, and the debt shows on your record. Fine for a one-off shortfall. Expensive as a habit.
3. Pay by card through a third-party platform. Services such as pay.com.au, B2Bpay, RewardPay and Payment Logic take your card and pay the ATO by BPAY or transfer. As at 1 October 2026 pay.com.au lists 1.20% for Visa and Mastercard and 2.10% for American Express on its free plan. You keep the interest-free days and the points. It only works if your card limit covers the bill and you clear it inside the interest-free period. Carry it past that and you are paying card interest, typically near 20% p.a., which is more than most overdrafts, and a revolving card balance tends to stick.
4. A business overdraft. Draw what you need on the due date, pay the ATO by transfer, repay as cash comes in. Interest is only charged on the days you are drawn, and it is tax deductible. An unsecured business overdraft up to $150,000 can be approved on six months of bank statements, with no property security and no tax returns. The ATO sees a payment on time, not a debt.
5. A short-term business loan. For a one-off bill where you want a fixed repayment schedule and no revolving limit. Rates are usually higher than an overdraft, so use it when the amount is large and the repayment window is clear.

Overdraft figures use simple interest on a fully drawn $50,000 for 90 days. Line fees on the panel typically run 0.5% to 2% p.a. of the limit, about $60 to $250 for 90 days on a $50,000 limit; see business overdraft fees explained. The 20% card rate is a typical business card purchase rate, not a specific product. Deductions only help a business that is paying tax. For the weekly cost of a facility this size, see how much a $50,000 business overdraft costs or the $50,000 business overdraft page.

The deductibility maths, in one paragraph

At a 25% company tax rate, any deductible facility under about 15.5% p.a. costs less than the ATO's 11.51% once tax is counted. On a 37% marginal rate the breakeven is about 18.5%. The cheapest bank unsecured overdraft on our checked rates table sits at 13.96%, and the floor of the non-bank panel is 14.55%, both under that line. Towards the top of the non-bank range the overdraft costs more than GIC in pure dollars, and the case for it rests on the other things: no ATO debt on your file, a limit you control, and interest only on the days you use it. How the deduction works is covered in is a business overdraft tax deductible.

What we have seen

The pattern that lands on our desk most often, from Sydney tradies to Brisbane civil contractors and Melbourne hospitality groups, is a business turning over $60,000 to $150,000 a month that has run its BAS through an Amex for years. The card was never the cheapest money, it was the easiest. When the card stops, the first instinct is a payment plan, and the second BAS lands before the first plan is finished. Set up before December, that same business is usually approvable for an unsecured overdraft of $30,000 to $100,000 on six months of statements, with a decision from 1 hour and funding typically within 24 to 48 hours of approval. Set up in February with an ATO plan already running, it is still fundable with most non-bank lenders, but the rate is higher and the conversation is harder.

The other pattern is the business that only needs 30 to 50 days of float on a bill it can cover. For that owner the card-through-a-platform route at about 1.2% is sound, provided the limit is there and the balance is cleared. It is a float tool, not a funding tool. Our guide to paying a large ATO tax bill works through the funding options in more depth.

Want JP to look at your numbers before December? Talk to our Sydney-based broker (we work with businesses in every state), or see how much you could borrow and whether you would be approved first.

What to do before 30 November

1. Log in to ATO online services and check whether any payment plan or direct debit is linked to a card. Change it to a bank account now.
2. If you were always going to use the card, the cutoff is now 30 June 2027, so plan the switch before then rather than after.
3. Diarise the first bills you will face without a card: the 21 January 2027 monthly BAS, the 28 February 2027 quarterly BAS, and the December quarter PAYG instalment.
4. Work out the biggest single ATO payment you make in a year and decide now how you will fund it: cash, platform or overdraft. The business overdraft calculator shows the interest on any amount for any number of days.
5. If it is the overdraft, apply while there is no ATO debt on your statements. Approval is faster and cheaper that way.

This is one of three 2026 changes squeezing small business cash at the same time. The other two, and a worked example of what they add up to, are in the 2026 small business cash flow squeeze.