How to Earn Points Paying ATO Tax & Bills in 2022

How to Earn Frequent Flyer Points for Paying Tax & Bills
It may be a little more complicated now, but there are still some lucrative ways to earn points for ATO tax payments. Photo: Adobe Stock.

The “good old days” of easily earning points on your credit card by paying tax to the ATO are largely over, with most Australian banks no longer awarding points on personal credit cards for payments directly to the government.

You can still earn points for ATO tax payments on a small handful of Australian credit cards, including some American Express cards and some business credit cards offered by NAB and CommBank.

But even if your bank doesn’t technically award credit card points for tax or government payments, you can still earn points for paying tax in Australia. In fact, you can even earn points on your credit card when paying billers that don’t normally accept credit card payments at all.

The trick is to use a bill payment service such as Sniip, Yak Pay, B2Bpay or pay.com.au – and it can be quite lucrative!

These services allow you to pay almost any business, as well as the Australian Tax Office (ATO), using your credit card. If you have a points-earning credit card, you’ll then earn points on your card for the transaction at the full earning rate for everyday purchases. This works even if your card provider doesn’t normally award points (or gives them at a reduced rate) for government payments.

How much do these services cost?

These bill payment services are not free. A small payment surcharge applies when using these platforms. You can find the cost for each service in the table below.

If you’re earning points for the transaction, and would not have otherwise been able to do so (e.g. if paying the ATO on a card that doesn’t give any points for government transactions), paying this small fee could be worthwhile.

If you’re paying a business-related expense, you may even be able to claim the payment fee as a tax deduction (although you should seek independent advice on this).

There are a few other catches. For example, you generally need an ABN to use these services as they are designed to faciliate business-to-business payments. And in some cases, you’ll only be able to pay billers that accept BPAY payments. But if you’re a small business owner and paying tax or rates bills, for example, you’ll almost certainly be able to use these payment platforms if you want to.

 

Earning bonus points

Some bill payment services even give you bonus points, on top of any points earned through your credit card.

For example, you can also earn 1 Qantas point per $7 paid to the ATO through B2Bpay if you’re a Qantas Business Rewards member. This increases to 3 Qantas points per $1.50 with “bonus billers”, and you’ll earn 1 Qantas point per $10 with other billers.

With Yak Pay or Payment Logic, you can earn your choice of Qantas Business Rewards or Velocity points in addition to any points earned via your credit card. You’ll earn 1 point per $7 paid to the ATO, and 1 point per $10 paid to most other billers.

 

How do the bill payment services compare?

There are many business-to-business payment services in Australia – and the number continues to grow as banks crack down on earning points for tax payments. We’ve compared the fees charged by nine Australian providers.

Note that Yak Pay recently changed its fee structure on 1 April 2022. Mastercard payments became cheaper but most Visa payments became more expensive, except for “Crypto.com” Visa cards which still attract a fee of 1% + GST. With Yak Pay, payments made using “Mastercard Business Exec” cards including Westpac business cards are also now charged at a higher rate of 1.2% + GST.

Here are the fees applicable to Visa, Mastercard and American Express payments with each service provider:

 

Service Visa Mastercard Amex
B2Bpay 1.2-1.55% (depending on card type) + GST 1.2-1.55% (depending on card type) + GST 2.2% + GST
RewardPay 1.65-2.15% + GST (depending on amount) for Amex only
Payment Logic 1.69-2.15% + GST (depending on amount) for Amex only
Easy Bill Pay 1% + monthly fees 1% + monthly fees 1.7% + monthly fees
Yak Pay 1.2% + GST 0.8% + GST 1.69-2.15% + GST
CreditRewards 1.81% + $1/transaction 1.81% + $1/transaction 1.81% + $1/transaction
Sniip 1.5% 1.5% 1.5%
pay.com.au 1.0-1.2% + GST 0.8-1.0% + GST 1.9-2.1% + GST

 

As you can see, each of the services has a slightly different fee structure. B2Bpay, RewardPay, Yak Pay and pay.com.au also exclude GST (which adds 10% to the cost) in the quoted fee amount.

On the surface, it would appear that Easy Bill Pay has some of the lowest fees. But this doesn’t account for their $24.95 monthly account fee, or their 0.75% “High Value Processing Fee” surcharge on payments over $20,000 in a calendar month. This reduces the value proposition of Easy Bill Pay significantly.

With pay.com.au, the amount paid depends on your membership level. Free members pay 1% + GST for Mastercard payments, but this reduces to 0.90% + GST for “regular” members and 0.80% + GST for “premium” members. Regular and premium membership of pay.com.au costs $85 or $165 per month, respectively.

With that taken into account, it would appear that pay.com.au is the best value for Visa payments. Yak Pay is good for Mastercard payments, and Sniip is the best value option for American Express payments.

With a 1.5% surcharge (including GST) on American Express payments, Sniip’s fee is barely higher than the 1.45% Amex surcharge that the ATO itself collects. Plus, with Sniip, you could earn credit card points at the full Amex rate rather than the reduced rate that applies to many Amex ATO payments.

 

Is it worth using a bill payment service?

If you’re paying a biller that doesn’t otherwise accept credit card payments, or your bank won’t award points for the transaction, this is a way to earn points for payments you have to make anyway. But you do have to pay a surcharge, so the points aren’t entirely free.

If you’re earning a high rate of uncapped points from your credit card, it could be worth paying your bills this way. For example, if you have a Qantas Premier Titanium Mastercard, you could earn 1.25 Qantas points per $1 paid to the ATO by using a service like Yak Pay. You would pay a 0.88% surcharge (including GST) for the payment, but the benefit of the points earned could well outweigh the cost if you’re redeeming your Qantas points for reward flights or upgrades. If you’re able to claim a tax deduction on the payment fee, the value proposition is even better.

If you’re running a business, these services can also help you to manage your cash flow and some provide itemised invoices & payment summaries. So apart from the ability to earn points, they do offer some additional value as well.

But if you’re paying a supplier that doesn’t charge a credit card surcharge, and you could earn points for the transaction without using a service like this, it clearly makes little sense. The main benefit is the possibility to earn points at the full rate for tax payments, which would otherwise no longer be possible with most Australian credit cards.

 

Join the discussion on the Australian Frequent Flyer forum

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Matt Graham
The editor of Australian Frequent Flyer, Matt's passion for travel has taken him to over 60 countries… with the help of frequent flyer points, of course!
Matt's favourite destinations (so far) are Germany, Brazil, New Zealand & Kazakhstan. His interests include economics, aviation & foreign languages, and he has a soft spot for good food and red wine.

You can contact Matt at [email protected]

Community Comments

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I've used RewardPay a few times for ATO BAS bills and it's worked well. I'm ok with the cost.

Just found b2bpay.com.au which seems to offer Qantas points as well, for the same earn rate/surcharge.

Anyone used them?
Is there any other alternatives I should look out for?

Is there any other sources available for non-abn holders to utilise similar services for using credit cards to pay for bills etc where bank transfer is the only option??? I know you can use PayPal but requires the receiver to have paypal.

Alternatively - is it problematic to register for an abn purely just to use this service?

I just hate when I have to pay via EFT and earn zero points.

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B2BPay does not remit the payment reference/description when you do a direct deposit payment and as such the receiver only sees "B2BPAY" on their end. Instead B2BPay sends a reconciliation report by email to the receiver where the receiver is reliant on that report to allocate the payment to you. I would recommend that people avoid B2BPay due to this downside which RewardPay doesn't have.

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B2BPay does not remit the payment reference/description when you do a direct deposit payment and as such the receiver only sees "B2BPAY" on their end. Instead B2BPay sends a reconciliation report by email to the receiver where the receiver is reliant on that report to allocate the payment to you. I would recommend that people avoid B2BPay due to this downside which RewardPay doesn't have.

If this is the case and ATO is paid how are the funds allocated to the correct account?

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If this is the case and ATO is paid how are the funds allocated to the correct account?

I would say that would be a very interesting situation because getting the ATO to fish out a transaction like that would be rather fun. If using B2BPay for ATO I would use the Bpay option in B2BPay instead as Bpay forces you to have a reference number passed through to the merchant.

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I’m willing to sign up and give it a go as a BPay payment to ATO. What’s the merchant rate for Amex? Says from 1.2% ‘dependingon your card type’. If Amex isn’t too different to RewardPay, don’t see the need to join another payment portal. Interesting that will work with other cards and offer BPay given RewardPay is Amex exclusive and has no BPay option.

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I’m willing to sign up and give it a go as a BPay payment to ATO. What’s the merchant rate for Amex? Says from 1.2% ‘dependingon your card type’. If Amex isn’t too different to RewardPay, don’t see the need to join another payment portal. Interesting that will work with other cards and offer BPay given RewardPay is Amex exclusive and has no BPay option.

Identical Amex fee to RewardPay.

If doing direct deposit type payments, I would strongly recommend RewardPay over B2BPay.

If doing BPay payments, then use B2BPay, but strictly only for BPay payments only. Basically I would only recommend using B2BPay when RewardPay won't do it.

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B2B pay now has a 10 000 bonus point offer, so I'm tempted to use it for an ATO Bill on my Amex explorer.
The hint above to use BPAY is really helpful, I hate to think what would happen if the ATO could not match the direct debit to my account.
Has anyone used B2B pay for ATO?

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B2Bpay amex fee is 2.64%

How much is Rewardpay?

Reply Like

B2Bpay amex fee is 2.64%

How much is Rewardpay?

You will be charged 2.40% + GST for each transaction

Have A Question About How RewardPay Can Help You? Read Our FAQs

So, the same.

Reply Like

B2Bpay amex fee is 2.64%

How much is Rewardpay?

They are both 2.4% +GST

B2Bpay also accepts other cards at lower fees.

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