The ATO is ending credit card payments. What does this mean for business cash flow.

From 1 December 2026, businesses will no longer be able to pay the ATO by credit card.

For businesses that relied on a card's interest-free period to manage BAS, PAYG or income tax, this is more than a change in payment method. It removes a source of short-term working capital.

Tax obligations will still fall due on the same dates. What changes is how businesses fund the gap between when tax is due and when cash comes into the business.

The ATO will stop accepting credit cards as a payment method after 30 November 2026.

The change follows the Reserve Bank of Australia's Review of Merchant Card Payment Costs and Surcharging, which ended card surcharging from 1 October 2026.

The ATO's reasoning is simple. As a government agency, it decided it would not be appropriate for the cost of credit card merchant fees to be passed on to the community.

Payments through Visa, Mastercard and American Express credit cards are all impacted.

For businesses that used a credit card to pay the ATO, the card was not necessarily just a convenient payment method.

It could also provide additional time between the tax due date and the day cash actually left the business.

That matters when customer payments, payroll, inventory purchases and tax obligations don't fall neatly into the same week.

For example, a business with a $150,000 BAS liability might previously have paid the ATO by card and then had several more weeks before the card balance became due. That extra time could allow customer receipts to arrive before the cash ultimately left the business.

From 1 December, paying the ATO directly from a bank account may bring that cash outflow forward.

The ATO itself has acknowledged that changing a payment method businesses rely on could make managing cash flow harder.

According to the ATO, around 2.3% of tax payments were made by credit card in 2024-25.

That percentage may appear small, but the more important issue is how dependent those users were on card terms for liquidity.

More than 60% of credit card tax payments came from privately owned and wealthy groups, public companies and multinational businesses.

For businesses using credit cards deliberately to manage timing differences between tax payments and incoming cash, the change removes a working capital tool that may have formed part of their regular cash-flow strategy.

"For a lot of established businesses, putting the BAS on a card was a working capital decision, not a payment preference. That option has gone, but the need for working capital hasn't. Tax is still due on the same dates, and the cash has to come from somewhere." says Brett.

The ATO change follows broader changes to card payment costs in Australia.

From 1 October 2026, businesses can no longer separately surcharge customers for card payments across designated card networks.

While lower interchange fee caps are intended to reduce some merchant costs, businesses may still need to absorb card acceptance costs into their overall pricing.

For some businesses, this creates pressure at both ends of the cash-flow cycle.

They may have less ability to recover card acceptance costs from customers, while also losing the ability to use a credit card to defer the cash impact of ATO payments.

That makes working capital planning more important, particularly around BAS, PAYG and income tax due dates.

Businesses on an ATO payment plan linked to a credit card need to act now. The ATO says credit card payments after 30 November 2026 will be unsuccessful, and the payment plan may move into arrears or default. Cut-off dates apply to changing the payment method.

The ATO is writing directly to affected taxpayers. Don't wait for the letter. Check how your plan is funded today.

OctetExpress allows businesses to use an existing credit or debit card to make eligible ATO payments, even after the ATO stops accepting credit cards directly.

You pay Octet using your linked card, and Octet makes the payment to the ATO on your behalf.

That means businesses can potentially retain the timing benefit of their existing card cycle without changing how they fund the payment.

There is no traditional credit assessment, and businesses can be set up quickly, subject to eligibility and onboarding requirements.

Brett says "For businesses that are comfortable with their current card-based approach, OctetExpress provides the most direct way to adapt to the ATO change."

For some businesses, the ATO change may expose a broader working capital issue.

"If a business has been relying on credit cards because cash is tied up in unpaid invoices, needed for payroll or inventory, or because existing ATO debt has become difficult to manage, simply finding another way to make the payment may not solve the underlying problem," cautions Brett.

In addition, since July 2025, the General Interest Charge (GIC) on tax debt is no longer tax deductible. That makes carrying ATO debt more expensive than it used to be.

That is where Octet’s working capital facilities can help.

OctetDebtor can unlock cash tied up in outstanding invoices, bringing forward cash already owed to the business. That can provide additional liquidity around BAS, PAYG and other tax due dates without waiting for customers to pay first.

OctetTrade provides a flexible line-of-credit to help manage eligible ATO payments while preserving cash for wages, suppliers, inventory and other operating expenses.

An Octet Term Loan of up to $5 million, when combined with OctetDebtor or OctetTrade, can potentially be used to refinance existing ATO debt as part of a broader working capital solution.

Eligible facility payments may also earn direct airline rewards points.