Credit Cards that Earn Rewards on ATO Payments

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.

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rewards program
ATO earn rate
sign up bonus
Points earned
American Express Business Explorer Credit Card
Apply by 15 jan 20
Receive 100,000 bonus Membership Rewards points when you apply by 15 January 2020, 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
1 pts
per $1 spent
100,000
points
after spend criteria
Transfers to 50,000
Velocity points
Receive 15,000 Membership Rewards points or 7,500 Qantas Points when you apply online, are approved and spend $750 outside of David Jones within the first 3 months of becoming a Card Member.
Earn up to 3 Reward Points per $1 spent at major supermarkets and petrol stations, 2 Reward Points per $1 spent at David Jones, and 1 Reward Point per $1 spent elsewhere.
Flexibility to choose Qantas Frequent Flyer or Membership Rewards as your rewards program.
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Membership RewardsQantas Frequent Flyer
Membership Rewards or Qantas Frequent Flyer
1 pts
per $1 spent
15,000
Membership Rewards points
after spend criteria
Receive 30,000 Membership Rewards points or 15,000 Qantas Points when you apply online, are approved and spend $750 outside of David Jones within the first 3 months of becoming a Card Member.
Earn 4 Reward Points per $1 spent at David Jones, 3 Reward Points per $1 spent at major supermarkets and petrol stations and 1 Reward Point per $1 spent elsewhere.
Flexibility to choose Qantas Frequent Flyer or Membership Rewards as your rewards program.
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Membership RewardsQantas Frequent Flyer
Membership Rewards or Qantas Frequent Flyer
1 pts
per $1 spent
30,000
Membership Rewards points
after spend criteria
American Express Qantas Business Rewards Card
Apply by 29 jan 20
100,000 bonus Qantas Points when you are approved by 29 January 2020 and spend $3,000 in 2 months.
Earn triple Qantas Points for your business when employees fly on eligible Qantas flights and pay using their American Express Qantas Business Rewards Card.
Earn 2 Qantas Points per $1 spent on Qantas products and services.
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Qantas Business Rewards
Qantas Business Rewards
0.5 pts
per $1 spent
100,000
points
after spend criteria
American Express Velocity Business Card
No pre-set spending limit means more flexibility.
Earn 2 points per $1 spent on Virgin Australia services and up to 1 point per $1 spent on other purchases, except for government bodies where you’ll earn 0.5 points per $1 spent.
Extend your cash flow up to 51 days.
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Velocity Frequent Flyer
Velocity Frequent Flyer
0.5 pts
per $1 spent
-
NEW
American Express Velocity Platinum Credit Card
Apply by 12 feb 20
8 reviews
Receive 100,000 bonus Velocity Points when you apply by 12 February 2020, are approved and spend $3,000 within the first 3 months. This offer is available to new Card Members only.
Earn 1.25 Velocity Points per $1 spent, except government bodies where you will earn 0.5 Velocity Points per $1 spent.
A complimentary domestic return flight every year with travel insurance and entry into Virgin Australia Lounges.
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Velocity Frequent Flyer
Velocity Frequent Flyer
0.5 pts
per $1 spent
100,000
points
after spend criteria
Get 55,000 bonus Qantas Points when you apply online, are approved and spend $3,000 on your new Card within the first 3 months.
Earn 1.25 Qantas Points for every $1 spent on Card purchases, except spend at government bodies in Australia where you will earn 0.5 Qantas Points per $1 spent.
$450 Qantas Travel Credit each year. (Conditions Apply)
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Qantas Frequent Flyer
Qantas Frequent Flyer
0.5 pts
per $1 spent
55,000
points
after spend criteria
Get 50,000 Membership Rewards points when you apply online, are approved and spend $3,000 in 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.
T&Cs and eligibility criteria apply. Available to new card members only.
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Membership Rewards Gateway
Membership Rewards Gateway
1 pts
per $1 spent
50,000
points
after spend criteria
Transfers to 25,000
Velocity points
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
1 pts
per $1 spent
-
No annual card fee to pay each year.
Base earn rate is 0.75 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
-
Earn up to 1.5 Membership Rewards point 1 for every $1 spent
No pre-set spending limit means more flexibility.
Extend your cash flow up to 51 days.
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Membership Rewards Ascent
Membership Rewards Ascent
1 pts
per $1 spent
-
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Q&As about Credit Cards that earn Rewards on ATO Payments from customers

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.

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.

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.

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.

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.

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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