Credit cards that earn points with ATO tax payments

GUIDE: Earning Points
DIFFICULTY: Hard
TIME TO READ: 8 minutes
POSTED: August 8, 2018
UPDATED: August 8, 2018
LOYALTY PROGRAMS: Relevant to Multiple Programs

One of the questions often considered by anyone who has to pay tax bills to the ATO is ‘how do I earn the most points on this transaction?’.

The answer is a moveable feast—cards keep changing, so we’ve attempted to compile a list of cards that allow points to be earned when paying your tax bill.

Many banks explicitly prohibit earning points on these types of transactions, with a common theme of more banks explicitly prohibiting ATO payments as being eligible for points earn.

There are a few cards on the market that do still offer the ability to earn points for ATO transactions—mainly American Express and select Mastercard cards—and in this guide, we cover off the current list of cards, their notable terms and restrictions, and a small number of points-earning alternative payment options.


Navigating this guide

This a complex topic that requires explanation. There is no single best answer for everyone—it will depend on the cards you may already hold and the rate at which you are prepared to fund a surcharge in order to use your credit card.

If you’re planning on making a payment to the ATO using a credit card, you should absolutely read this guide in its entirety—there is a lot of important and useful info in here! Set aside some time to read and understand it in full.

As a result, this guide is split into several sections:

  1. Caveats and disclaimers ↓
  2. Cards that earn points at the ATO ↓
  3. Considerations when using points-earning credit cards to make tax payments ↓
  4. How to make a payment to the ATO using a credit card ↓
  5. A detailed look at the PDS/terms & conditions for the cards referenced ↓
  6. Paying the ATO via RewardPay and B2BPay ↓
  7. Other options for paying the ATO and earning points ↓

Note first: caveats and disclaimers

  • Do your own research by reading the credit card and rewards program PDS documents, asking the relevant bank and comparing your research with other online sources
  • We have tried to make this list as complete and as accurate as possible but it is possible we could have missed a card, have an error in our calculations or did not complete quite enough research, so please let us know in the comments of this article if you find anything wrong
  • There are legitimate reasons for having to pay the ATO as either a personal entity or as a business entity. Many banks prohibit unreasonable amounts of business transactions on personal cards. We have tried to note the relevant terms and conditions of different bank rewards programs below. Our recommendation: if using a card extensively for business purposes, consider a specific business credit card that explicitly permits points earn at the ATO
  • Any advice in this guide is general advice only and does not consider any of your personal circumstances and existing banking relationships/products
  • Things can change—his list was last updated on the date shown at the top of this guide

Frequent flyer/rewards credit cards that earn points at the Australian Tax Office (ATO)


Credit CardPoints earned per $ spentEffective cost per frequent flyer point earned when paying surchargePoints capNotes
Most American Express-issued cards
e.g. Explorer, Platinum Edge, Platinum Charge
0.5 Membership Rewards points2.9c per MR pointVaries by card—some none; some cappedCheck the individual guides for each card in our cards table
Westpac Altitude Black & Platinum American Express cards

Notes ↓ | Guide →
1 Altitude Rewards point or
0.5 Qantas Points
1.45c per Altitude Rewards point or
2.9c per Qantas Point
UncappedThe Mastercard versions of these cards do not earn points on ATO payments
CommBank Business Platinum Awards

Notes ↓ | Guide →
1 CommBank Awards point0.52c per CommBank Awards point300,000 CommBank Awards points per yearCommBank Awards terms explicitly permit points earned at the ATO and for Business Transactions up to the points cap—see notes below
Bankwest Qantas World Mastercard

Notes ↓ | Guide →
0.66 Qantas Points0.78c per Qantas PointUncappedThese cards' terms exclude points earn on 'government charges' other than GST payable to the ATO and 'business related expenses'—see notes below

World card is invite-only, so Platinum included as additional reference point
Bankwest Qantas Platinum Mastercard

Notes ↓ | Guide →
0.5 Qantas Points1.04c per Qantas Point200,000 Qantas Points per year

About this table

  • There is no ranking or endorsement of a specific credit card implied in the above table
  • Cards/banks that do not allow points earn for ATO transactions include but are not limited to: ANZ Rewards & Frequent Flyer, Bank of Melbourne, BankSA, Citi (and Citi-managed cards, including Virgin Money, CUA and Diners), CommBank (personal cards), HSBC, Jetstar Mastercard, Macquarie Platinum/Hilton, NAB, Qudos Bank, St.George and Woolworths Money—and most others

Considerations when using a points-earning credit card to make a tax office payment

There are a handful of different ways to make a payment to the ATO but this guide is focused on the ability to make a payment that earns rewards points.

There’s also the option of using RewardPay and B2BPay with your American Express card to make a payment to the ATO using their payment service. More on this below.

When paying the ATO directly using a credit card, you’ll incur a surcharge on the payment:

Payment methodSurcharge
BPAY/bank transferNone
Mastercard/Visa Debit0.15%
Mastercard Credit0.52%
Visa Credit0.78%
American Express1.45%
Visa/Mastercard international payments2.70%

The surcharge amount is often a tax-deductible expense for a business but double check with your accountant or tax advisor for your own circumstances if planning to claim this expense as a tax deduction, or if this is important to you.

Your personal circumstances might dictate that a payment via bank transfer or BPAY makes more sense than incurring a surcharge, so bear that in mind.

How to work out whether the ATO credit card surcharge is worth paying

This is a key part of figuring out whether to use a points-earning credit card for ATO payments.

The first thing to consider is the value you place on your points. You can check out our list of rewards points values, which might help you.

Once you have a handle on how much you value a point, you can then place a value on the total number of points earned by paying the ATO with a credit card surcharge. Here is a simplified example:

Say you have a 1 point per $ spent earn on a card and you value the points earned at 1.5c per point. If the tax bill you have to pay is $2,000, then you’ll earn 2,000 points, which have a value to you of $30.

With the ATO’s surcharge of 0.52% on Mastercard payments, you are paying $10.40 to earn the 2,000 points, or 0.52c per point. The $10.40 paid is less than the $30 you value the points earned, so in this case, you may consider paying using this credit card.

As an alternative example, let’s consider an example with an American Express, with a 0.5 point per $ earn rate. The surcharge of 1.45% means that you are paying 2.9c per point, which is higher than the 1.5c per point value you place on the points earned, so in this case you most likely wouldn’t consider paying using this credit card.

So three things you need to consider before you decide whether a surcharge is worth paying:

  1. The value you place on points you earn with your credit card
  2. How many points the credit card you are planning to use earns per $ spent at the ATO
  3. The surcharge incurred for using your chosen payment method by the ATO

This analysis does not take into account:

  1. Any tax-deductibility of the ATO payment fee
  2. The cost of ownership of the credit card, such as its annual fee
  3. The cost of any interest incurred for balances you are carrying on the card—the assumption in this guide is that no interest will be paid for your ATO payment. If you are planning on carrying the ATO balance on a card and incurring interest on this balance, then the interest incurred will likely be far higher in cost than the value of the points earned

How to make a payment by credit card directly to the ATO

The primary way to make a payment by credit card is to head to the ATO EasyPay Portal and input the reference number given to you by your accountant or the ATO for your payment.


A detailed look at the PDS/terms & conditions for the cards referenced in the table

Let’s get stuck into some details of some of the cards in the table and their related terms and conditions.

Westpac Altitude Black & Platinum American Express cards

Whilst the terms and conditions for the Mastercard for these two products state:

You do not earn Altitude Points or Qantas Points on payments to the Australian Taxation Office.

the American Express companion card allows for government payments:

Merchants classified as “government” include the Australian Taxation Office, the Australian Postal Corporation (Australia Post), federal/state and local government bodies.

CommBank Business Platinum Awards Mastercard

The only CommBank card that expressly permits points earn at the ATO is the Business Platinum Awards credit card, whose PDS gives a points cap of 300,000 CommBank Awards Points on per year as well as:

The following transactions are excluded from earning points:…payments to the Australian
Taxation Office unless made using a Business Awards card…

Bankwest Qantas World and Platinum Mastercards

The Bankwest Qantas Rewards PDS states:

Qantas Points are earned on all purchases made using the Card Account except:…Government charges (other than GST payable in connection with the purchase of goods or services on which you earn Qantas Points)…[and]…Business Related Expenses

There is no definition of ‘Government charges’ in the document, so it is unclear if Bankwest does consider a personal transaction to the ATO as a government charge. It is clear the card should not be used for business-related expenses. The bank can also decide that any transaction they feel like can be excluded from points earning.


Using RewardPay and B2BPay to make ATO payments

Rather than making a credit card payment directly to the ATO, you can earn the full rate of credit card points by paying a surcharge to services like RewardPay and B2BPay and having them make the payment to the ATO on your behalf. You’ll also earn Qantas Points on these transactions.

In short, RewardPay and B2BPay are business-to-business payment services that allows its members to use American Express cards, with a 2.4% + GST surcharge.

It is reasonable to assume that using RewardPay and B2BPay with a personal American Express that does not permit business transactions (read the section on terms and conditions for each card above) might cause issues with your account.

That said, assuming you have a card that is OK for business-related transactions, paying the surcharge to make a bank transfer using your American Express card may make sense if your card earns at least 1.5 frequent flyer points per $ spent—read the RewardPay guide here and the B2BPay guide here to understand how that’s calculated.

There are several American Express options that earn the equivalent of at least 1.5 frequent flyer points per dollar—we’ve explored the options available for highest points earning cards with RewardPay in a separate guide.

American Express terms and conditions for most of their personal cards do not specify that business-related transactions would be excluded from earning points—indeed, using personal cards for business purposes is definitely permitted by American Express.

If you have an American Express that you can use with RewardPay or B2BPay, paying the ATO is just like paying another supplier using the RewardPay or B2BPay platform—you use the ATO’s ABN and address details, which are available on the ATO website.

For more questions about this, you would be best to contact them directly.


Other options for paying the ATO and earning points

Another option for making payments to the ATO is to jump on prepaid debit Mastercard or Visa deals that can initially be purchased using a points-earning credit card.

Usually, the cost of acquisition of these cards is too high but there can be short-term offers for which you can keep an eye out for and then apply the same maths as above to figure out the cost of payment method vs points earned.

There are also other hazards in using prepaid cards to pay the ATO—depending on the amount of money that can be loaded onto the card at point of purchase, you could be running many cards through the ATO payment portal, and each payment and its surcharge would need to be accounted for independently if it is being made on behalf of a business.


Summing up

There’s no ‘best option’ amongst this list as the permitted transactions, points earned with each card and associated cost (and return in points) of payment to the ATO vary greatly from card to card.

We also cannot recommend specific cards to use for your circumstances, so dig through the few remaining cards in the table and the list of considerations above, and try to find an option that works for your own valuation of points and whether it is worth paying the ATO surcharge to earn them.

Their surcharges could/will change over time, of course.

Earning points from transactions to the ATO—once you have a card that offers this option—can be a very simple way to build your points balances from payments you had to make anyway.

It could also be a costly mistake if you overvalue the points earned or pay using a card that you thought earned points with ATO transactions but does not.

There is no doubt this is a complex and ever-changing landscape, and we will continue to update this list on changes being made by the banks to keep you updated.

There are still a number of points-earning credit cards for spend with the ATO and our general advice is to try to read and understand the terms of each card as much as possible and try and find the right fit for your own circumstances and preferences.

Credit cards that earn points with ATO tax payments was last modified: August 8th, 2018 by Keith