If your 2025-26 tax return turns into a bill, paying it on a credit card has quietly become cheaper this month, and it now has an end date. Card surcharges were removed across the major networks from 1 October 2026, so the ATO can no longer pass its card fee on to you, and it has confirmed it will stop taking credit cards for tax after 30 June 2027. For anyone planning to apply for a car loan in the next few months, how you pay this year's tax bill can change what a lender sees.
This article sets out what the ATO has announced, how the dates fit together, and how putting tax on a card compares with an ATO payment plan when a car loan application is coming up. It is general information only, not financial or tax advice.
What changed for ATO credit card payments in October 2026
The Reserve Bank concluded it is in the public interest to remove surcharging for eftpos, Mastercard and Visa from 1 October 2026, and its FAQ lists American Express as also removing surcharging from that date.
That flowed straight through to tax payments. In its plain English explainer, the ATO says that when you pay by credit card it is charged a fee, that it previously asked you to pay that fee, and that the new rule from 1 October 2026 means it can no longer ask you to.
The ATO's dates then moved twice in a week:
- 2 October 2026: the Commissioner said the ATO would keep accepting credit cards only until 30 November 2026, describing merchant fees as almost $200 million a year.
- 9 October 2026: after discussions with the government and transitional funding, the ATO said it will continue accepting credit card payments until 30 June 2027.
The ATO's payment page now carries the same warning: after 30 June 2027 you will no longer be able to use a credit card to pay the ATO, while other methods remain. Debit cards, BPAY, direct deposit and Australia Post remain available. According to the Commissioner's statement, just over 2% of individual taxpayers used credit cards to pay their tax, so most people will not notice the change.
Why the timing matters right now
If you lodge your own return, the deadline is 31 October. Because that falls on a weekend this year, the ATO says self-preparers have until 11:59 pm local time on Monday 2 November to lodge on time, and that a resulting tax bill is generally due 21 November. Our 31 October tax return guide covers lodgment and notices of assessment, so this piece only deals with the payment side.
For this year's bill, a credit card is still an option, and without the surcharge it no longer costs extra at the point of payment. After 30 June 2027, the ATO says people who still want to use a card may use third-party payment providers, and it asks taxpayers to weigh those providers' fees, charges and processing times, and to check their credentials before sharing details. Our guide to checking a lender or broker before you apply uses the same verify first habit.
Card or payment plan: what a car loan lender may see
Paying the ATO on a card does not make the debt disappear. It converts a tax debt into a credit card debt, and that changes how it shows up when you apply for finance.
On a credit card. Moneysmart explains that a card's limit is based on your ability to pay it back within three years. Lenders assessing a car loan look at your income, bills and other commitments, and may decline where other debts reduce your capacity to repay. Moneysmart's own illustration on that page is a $10,000 car loan declined partly because of a $2,000 credit card debt. Each lender sets its own policy for how card balances and limits are assessed, so a card used for a tax bill is a commitment to disclose and plan around. Our guide to what lenders check on your bank statements explains how card repayments appear.
On an ATO payment plan. The ATO lets eligible people in financial difficulty pay by weekly, fortnightly or monthly instalments. The debt keeps accruing general interest charge (GIC), compounding daily, and you must pay any future tax in full and on time. A lender may treat the instalments as a regular expense. Our ATO tax debt and payment plan guide covers how plans work and how they can affect borrowing power.
Worked example: one month on a card versus GIC
This is a worked example with stated assumptions, not a quote.
Assumptions: a $3,000 tax bill left unpaid for 30 days. GIC is the ATO's published rate for October to December 2026, 11.51% a year or a daily rate of 0.03153425%, compounding daily. The credit card is an assumed purchase rate of 20.99% a year with simple daily interest and no interest free period applying. Card rates and interest methods vary, so check your own card's terms.
- GIC: $3,000 x ((1 + 0.0003153425) to the power of 30, minus 1) = about $28.51
- Card: $3,000 x 20.99% / 365 x 30 = about $51.76
On these assumptions the card costs about $23 more for the month. If you clear the whole card balance within its interest free days, the card interest could be nil, and the ATO debt would be gone. The trade-off is that any unpaid card balance becomes another debt on your application, while a payment plan is a fixed outgoing that ends when the debt is paid.
A short checklist before you pay
- Know your due date. Self-preparers are generally due 21 November. Paying late adds GIC to the balance.
- If you can pay in full, consider a non-card method. BPAY and ATO online services are the quickest ways to pay, using your payment reference number.
- If you use a card, plan to clear it. Treat the interest free days as the deadline, not the minimum repayment. If you raised your limit to fit the bill and no longer need it, Moneysmart notes a limit reduction usually takes one to two business days.
- If you cannot pay in full, look at a plan early. The ATO's estimator shows the upfront amount, minimum repayment and estimated interest before you commit.
- Disclose either one. Whether the tax sits on a card or a plan, include it on your car loan application.
If you are weighing up a car purchase at the same time, our car loan calculators can show how a new repayment sits alongside a card or plan, and the car loans page explains how Loanseekers compares options across lenders. Every lender applies its own criteria, so none of this guarantees an outcome.
