Short answer: The ATO will stop accepting credit cards as a payment method after 30 November 2026. If you pay BAS or tax on a card, or an ATO direct debit or payment plan is linked to one, you need another way to pay before your next instalment due after that date. Unpaid tax attracts GIC of 11.51% a year, compounding daily.
What is changing
The ATO will stop accepting credit cards as a payment method after 30 November 2026. It confirmed the change in a media release updated on 1 October 2026 (ATO). From December, a BAS, an income tax bill or a payment plan instalment cannot go on a card.
Two parts of the announcement matter most for business owners. Direct debits linked to a credit card must be updated before the next instalment that falls due after 30 November 2026. And the ATO is writing to people whose payment plans are linked to a card, so watch for that letter.
For most businesses this is a small admin change: switch the payment method and carry on. For businesses that have been using a card to buy time on their tax, it is a cash-flow change. That group needs a plan before the end of November, not on the morning the next BAS is due.
Why the ATO is doing it
The change follows the Reserve Bank’s review of merchant card payment costs and surcharging. The ATO’s view is that it would not be appropriate for merchant fees to be passed on to the community. Rather than carry that cost, it is removing the option.
Whatever you think of the reasoning, the date is fixed and the decision is made. The useful question is not why, it is what replaces the card in your own cash flow.
It is worth being honest about what the card was doing for some businesses. Paying a quarterly BAS on a card and clearing it from the next month’s receipts was, in effect, a small revolving facility attached to the tax bill. Removing the card does not remove the need for that facility. It just means the facility has to be arranged deliberately, with its cost and limit known in advance, rather than sitting quietly on a card statement.
Who this affects
- Businesses that float tax on a card. Paying BAS on a credit card and clearing the card weeks later has been a short-term gap for some owners. That gap closes after 30 November.
- Card-linked direct debits and payment plans. If an ATO plan draws its instalments from a credit card, it must be updated before the next instalment due after 30 November 2026. The ATO is writing to affected people, but don’t wait for the letter to act.
- Owners who pay by card for convenience or points. You will need a new payment method. That is an inconvenience, not a cash-flow problem, and nothing in this guide beyond the checklist applies to you.
- Businesses already behind. If the card was the only thing keeping a BAS from going overdue, you are now one quarter away from a tax debt, with interest that compounds daily.
If you already pay the ATO from a bank account and have no card-linked plan, nothing changes for you.
Your alternatives compared
The real question is not how to pay. It is where the money comes from in the gap the card used to cover. Here is how the options line up.
| Option | How fast | What it costs | Best for |
|---|---|---|---|
| Pay from cash flow | Immediate | Nothing extra, but less cash in the account | Businesses that have the money and used the card for convenience |
| ATO payment plan | Self-serve online for debts of $200,000 or less | GIC on the unpaid balance, compounding daily, not deductible | Modest debts with a repayment the business can genuinely meet |
| Business line of credit | Draw when BAS falls due, once the limit is set up | Interest on what you draw; costs set out in the offer | Recurring quarterly gaps; the closest swap for the card |
| Short-term business loan | Some funded in as little as 2 hours after approval | Costs set out in the offer before you sign | A one-off shortfall; needs 6+ months trading and bank statements |
| Property-secured loan | As little as 24 hours | Costs set out in the offer before you sign | Larger or older tax debts, $20,000 to $5M, no financials needed |
A business line of credit is the closest like-for-like swap: a limit you draw when BAS falls due and repay as customers pay you. A short-term business loan suits a single shortfall. For tax debts that have built up over several quarters, a property-secured business loan is usually the option that clears the whole amount in one go. Our guide to business loan costs explains what to ask for in writing before you sign anything.
What an ATO payment plan really costs now
A payment plan is the natural fallback, and for many businesses it is the right one. But the cost has changed, and it is worth seeing clearly.
The general interest charge (GIC) is 11.51% a year for October to December 2026, up from 11.43% for July to September. It applies to amounts left unpaid after the due date, it compounds daily, and it keeps accruing for the whole life of a payment plan (ATO). A plan spreads the debt out. It does not stop it growing.
GIC is also no longer tax deductible for income years starting on or after 1 July 2025 (ATO). What you pay is what it costs.
The plan rules matter too. Businesses owing $200,000 or less can set one up in Online services for business. Only one online plan can run at a time, and income tax and activity statement debts need separate plans. If a plan defaults, the full overdue balance becomes payable immediately and firmer action may follow, including garnishee notices and director penalty notices.
When a loan is the wrong answer
If the card was only ever a convenience and the money is in the bank, you don’t need finance. Switch to one of the methods the ATO lists at ato.gov.au/howtopay, such as BPAY, and move on.
The same goes for a small debt with steady trading behind it. A payment plan you can genuinely keep is often the sensible choice, and nobody should talk you out of it.
Borrowing earns its place in three situations. The gap is real and recurs every quarter. A plan has already failed once, which makes the next one harder to get and quicker to escalate. Or the debt has grown large enough to block something else, such as a refinance, a tender or a sale. If your BAS is already late, read what to do when you can’t pay BAS on time first.
Checklist: before 30 November 2026
- Check how you paid your last four BAS. If any went on a credit card, this change affects you.
- Check every ATO direct debit and payment plan. If one draws from a credit card, update it before the next instalment due after 30 November.
- Read any ATO letter about card-linked plans, but don’t rely on receiving one.
- Map your next two BAS due dates against the cash you actually expect to have on each date.
- Decide where the gap money comes from: cash on hand, a payment plan, a line of credit or a loan.
- Set up any facility before you need it. A line of credit arranged in November is far easier than a loan chased on the day BAS is due.
- Set up your new payment method from the ATO’s list so the first payment after the change is not also the first time you have used it.
- Talk to your accountant about the next two BAS amounts, so the figure you plan around is the real one and not last year’s.
Sort the replacement before your next BAS is due
The card option disappears on a fixed date, and BAS dates don’t move. If you would rather know your options now than on the due date, our pages on fast business loans and urgent business loans explain what is available and how quickly each can fund.
To see which of them actually fits your business, try the 60-second eligibility check. It makes no credit enquiry and costs nothing, and it is a lot less stressful to run in October than in the last week of a quarter.
Frequently asked questions
When exactly does the ATO stop accepting credit cards?
After 30 November 2026. The ATO confirmed the change in a media release updated on 1 October 2026.
What happens to my payment plan if it is paid by credit card?
The direct debit has to be updated to another payment method before your next instalment due after 30 November 2026. The ATO is writing to people with card-linked plans.
Is the general interest charge tax deductible?
Not for income years starting on or after 1 July 2025. For October to December 2026 the GIC is 11.51% a year, and it compounds daily.
Where can I find the other ways to pay the ATO?
The ATO lists its payment methods at ato.gov.au/howtopay.
Will paying my BAS late go on my credit file?
Not by itself. The ATO can report a business tax debt only when at least $100,000 is overdue by more than 90 days and the other reporting criteria are met.
Does it cost anything to apply?
No. There's no cost to apply or check your eligibility. All costs are set out in writing in your loan offer before you sign anything.
Will checking my eligibility affect my credit score?
No. Our 60-second eligibility check doesn't make a credit enquiry. A credit check is only done later, with your consent, if you decide to proceed.
