Credit Cards that earn Rewards on ATO Payments

Did you want to earn points while paying the Australian Tax Office? Compare some of your options.

If you have a points-earning credit card, it is possible to earn rewards and frequent flyer points when you pay your ATO bill, whether it’s for personal or business income tax, PAYG, BAS payments or a HECS debt. There are three ways to make the credit card payment online:

  • ATO EasyPay Service
  • Through your MyGov account
  • Through RewardPay.com.au

EasyPay

The ATO website offers a service known as EasyPay, which allows you to pay your tax bill using a credit card. This option is available to every kind of taxpayer, including incorporated businesses.

To pay your tax bill with EasyPay, you need to provide either your EFT (electronic funds transfer) code or your PRN (payment reference number) and your credit card details. The minimum payment amount is $10 and the maximum $20 million. (Congratulations are in order if you have a credit card with a limit which will accommodate the maximum amount).

MyGov

Individuals and sole traders can also access the ATO’s payment options (including credit card payments) by logging in to their MyGov account and clicking on the ATO option in the ‘My linked services’ section.

To pay through the MyGov/ATO portal you will need to select the tax account to which the payment is to be directed (e.g. Income Tax, or Activity Statement) and then enter the credit card details and payment amount.

RewardPay.com.au

RewardPay is a business-to-business payment service which facilitates the earning of credit card points when paying business expenses. Both the payer and the payee need to have an ABN, so it can be used by sole traders and small businesses when paying the ATO. RewardPay’s revenue source is the 2.4% (+ GST) surcharge it makes on all transactions.

Points to bear in mind when using a credit card to pay the ATO

  • Does the cost of the ATO or RewardPay surcharge exceed the value of the points earned? If so, it would make more sense to pay by BPAY or bank transfer.
  • If your card has a monthly or annual points cap, make sure that the payment will not exceed it, otherwise you may receive significantly fewer points than you expected.
  • ATO payments tend to have a specific due date, but if there is any flexibility, leverage the benefit by timing the payment to occur at the beginning of your billing cycle, thus maximising the interest-free days.

Since your payments to the ATO are unavoidable, it makes sense to derive some benefit from them by paying with a points-earning card that allows points to be earned on ATO transactions. But be aware that many rewards cards specifically exclude ATO payments from earning points. Those that do not exclude them may still have a tiered points table which places ATO payments at the bottom of the pile with the lowest earning rate per dollar spent.

All cards appearing on this page currently allow points to be earned on ATO payments, at varying rates per dollar, but terms and conditions can change quickly and it is possible that a different situation may apply in the future.

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rewards program
ATO earn rate
sign up bonus
Points earned
Receive 50,000 points when you apply online, are approved and spend $1,500 on your card within the first 3 months. Conditions apply.
A complimentary domestic return flight every year with travel insurance and entry into Virgin Australia Lounges.
Good points earning rates. Up to 2.5 points per dollar spent on purchases with Virgin Australia. 1.5 pts per $1 spent elsewhere.
More info
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Velocity Frequent Flyer
Velocity Frequent Flyer
0.5 pts
per $1 spent
50,000
points
after spend criteria
Get 55,000 bonus Qantas Points when you apply online, are approved and spend $1,500 in 3 months.
Earn 1.5 pts per $1 spent on card purchases.
Complimentary domestic and overseas travel insurance.
More info
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Qantas Frequent Flyer
Qantas Frequent Flyer
0.5 pts
per $1 spent
55,000
points
after spend criteria
Coles Rewards Mastercard
Apply by 31 dec 17
75 reviews
$100 off a single Coles Supermarket Shop if you apply and are approved by 31st Dec 2017 and make a purchase within 30 days. (t&c’s apply).
Earn 2 points per $1 you spend everywhere – that’s on top of the usual flybuys points from other partners.
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flybuys
flybuys
0.87 pts
per $1 spent capped
-
Receive 50,000 points when you apply online, are approved and spend $1,500 on your card within the first 3 months.
Receive a $400 Travel Credit each year towards any flights, hotels and car hire when you book online with this card.
Enjoy up to two entries per year to the American Express Lounge.
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Membership Rewards Gateway
Membership Rewards Gateway
0.5 pts
per $1 spent
50,000
points
after spend criteria
0% p.a. for 12 months for balance transfers and a one-off credit plan establishment fee of 1%.
Start your holiday with a $200 Travel Credit every year.
Range of travel insurances including overseas medical emergency expenses, travel cancellation cover and more.
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Membership Rewards
Membership Rewards
0.5 pts
per $1 spent
-
No annual card fee to pay each year.
Base earn rate is 1 pt per $1 spent. Get an additional 1 point per $1 when spending with Virgin Australia.
0% p.a. for 12 months for balance transfers and a one-off credit plan establishment fee of 1%.
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Velocity Frequent Flyer
Velocity Frequent Flyer
0.5 pts
per $1 spent
-
Receive 10,000 Membership Rewards points when you apply, are approved, and spend $1,000 in the first 2 months (New American Express Card Members only).
Earn up to 1 Membership Rewards point per dollar spent.
No pre-set spending limit means more flexibility.
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Membership Rewards Ascent
Membership Rewards Ascent
0.5 pts
per $1 spent
10,000
Membership
Rewards points
American Express Business Explorer Credit Card
Apply by 31 jan 18
Receive 100,000 points when you apply by 31st Jan 2018, are approved and spend $3,000 on your card within the first 3 months.
Earn 50,000 business loyalty bonus points when you spend $100,000 every 12 months from the card approval date.
Enjoy up to two entries per year to the American Express Lounge.
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Membership Rewards Gateway
Membership Rewards Gateway
0.5 pts
per $1 spent
100,000
points
after spend criteria
Receive 20,000 points or 15,000 Qantas Points. (Conditions Apply)
Earn up to 3 points per $1 spent at major supermarkets and petrol stations, 2 points per $1 spent at David Jones, and 1 point per $1 spent elsewhere.
Flexibility to choose Qantas Frequent Flyer points or Membership Rewards points.
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Membership RewardsQantas Frequent Flyer
Membership Rewards or Qantas Frequent Flyer
0.5 pts
per $1 spent
20,000
points
after spend criteria
Receive 40,000 points or 30,000 Qantas Points when you apply. (Conditions Apply)
Earn either Membership Rewards or Qantas Frequent Flyer as your rewards program.
Loads of instore benefits and perks at David Jones.
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Membership RewardsQantas Frequent Flyer
Membership Rewards or Qantas Frequent Flyer
0.5 pts
per $1 spent
40,000
points
after spend criteria
American Express Platinum Business Card
Apply by 31 jan 18
7 reviews
Receive 120,000 points when you apply before 31st Jan 2018, are approved and spend $5,000 on your Card within your first 2 months of Card Membership.
Earn up to 2 Membership Rewards points per $1 spent.
Platinum Business Concierge gives you 24/7 access to premium services.
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Membership Rewards Ascent
Membership Rewards Ascent
0.5 pts
per $1 spent
120,000
points
after spend criteria
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Q&As about Credit Cards that earn Rewards on ATO Payments from customers

Q: Do all rewards credit cards allow points to be earned on ATO payments?

No. Many rewards cards specifically exclude ATO payments, so the points earned on ATO payments will be zero.

Q: If my card does allow points to be earned on payments to the ATO, will it be at the same rate as other transactions?

Most unlikely. The cards that permit points to be earned on ATO payments usually allocate a lower earning rate to any transactions with government bodies.

Q: Why is the earn rate lower for ATO payments?

Until relatively recently, ATO payments attracted much the same points earning rate as other transactions. Banks were slow to recognise that ATO payments were among the largest payments an individual or business was likely to make where a credit card was accepted and could be used without any significant penalty (such as reduced ability to negotiate a favourable price, which might happen with a car purchase). This would most certainly have been eroding the banks’ overall profit on credit card transactions. Rather than apply more restrictive points caps (which would reduce a card’s general appeal) they decided to target ATO payments by either offering a lower earning rate or excluding them altogether.

Q: What credit card payment methods are available when paying the ATO?

Payments can be made through EasyPay (via the ATO website), through an individual taxpayer’s MyGov account, or through rewards credit card payment service Rewardpay.com.au. Surcharges are levied on all these payments.

Q: What about surcharges on ATO credit card payments?

The ATO also levies a surcharge for making payments through EasyPay or MyGov using a credit card. Currently these charges are 0.54% for Visa and MasterCard and 1.45% for using American Express. The ATO says that these charges are identical to the charges made by its own bank for processing the transactions, so the ATO is not making a profit on transactions.

The ATO credit card surcharge is tax deductible for businesses (so this should include Activity Statement payments for anyone with an ABN) but not for an individual’s income tax payments.

Q: When does it not make sense to use a rewards card for ATO payments?

Assuming that you are satisfied with the rewards points return you are getting on normal transactions when offset against your card’s annual fee and any other benefits, the additional cost of ATO rewards points lies in the surcharge levied on card payments by the ATO or RewardPay.com.au. The surcharge rates are 0.54% for Visa and MasterCard and 1.45% for AmEx if paying directly through EasyPay or MyGov. Payments through RewardPay.com.au attract a surcharge of 2.4% for any kind of card.

So the question you need to ask yourself is whether the cost per ATO reward point exceeds the value of an ATO reward point?

In fact, the value to you of any reward point depends not on the type of payment you are making, but the type of redemption you choose. Long haul flights usually offer the best value redemptions, while retail gift cards are amongst the most popular.

A Qantas economy return flight to the UK, if booked well ahead, costs around $1,870 for a base fare (i.e. excluding taxes) or 120,000 Qantas Frequent Flyer points. This puts a value of about 1.5 cents on each QFF point.

A $100 retail gift card costs 13,500 American Express Membership Rewards points, valuing each point at around 0.75 cents.

So Qantas points need to cost less than 1.5 cents each in surcharges to be worthwhile, and AmEx Membership Rewards points need to cost less than 0.75 cents, before the cost exceeds the value.

This means that, if you are paying directly through the ATO, a Visa/MasterCard needs to be earning points for ATO payments at the rate of more than 0.36 points per dollar (if redeemed for long haul Qantas flights) and more than 0.72 points per dollar (if used for retail gift cards). An AmEx card needs to be earning at the rate 0.97 points per dollar (for flight redemptions) or 1.9 points per dollar (for gift card redemptions). Payments through RewardPay need earning rates of 1.6 points per dollar (flight redemption) or 3.2 points per dollar (gift card redemption).

In a nutshell, if your Visa/MasterCard earns at least 0.5 points per dollar for ATO payments, or your AmEx card earns at least 1 point per dollar, and you intend to redeem the points for long haul flights, go ahead and pay the ATO by AmEx card through EasyPay or MyGov because you will be on the winning side of the cost/benefit calculation. But it’s not worthwhile if you intend to redeem points for gift cards, and payments through RewardPay will only be beneficial if your card earns 2 points per dollar or more for ATO payments.

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