It’s now easier to pay off smaller tax bills without incurring hefty fees – while still earning bonus points! Since the start of 2025, the ATO no longer charges payment fees on Australian debit cards. This includes prepaid Mastercard or Visa gift cards you can buy at the supermarket, often with a bonus points offer at Flybuys or Everyday Rewards.

Whilst there is usually a purchase fee, the value of the bonus points can easily outweigh the fee. Occasionally, some offers waive the purchase fee or discount the card instead. This could still be a clever way to earn points on your rewards credit card at no net cost. Here’s how.

What prepaid gift cards can I use at the ATO with no fee?

Theoretically, any Australian-issued prepaid Mastercard or Visa gift card shouldn’t incur fees when paying the ATO. However, the card issuer will usually charge an activation fee upon purchase.

Popular prepaid Mastercard and Visa gift cards sold in Australia include the Coles Mastercard gift card and the Vanilla Visa gift card. These can be used at the ATO. Many other variants go on special, but some can’t be used at the ATO. Check the card T&Cs and whether it can be spent ‘anywhere’ before purchasing.

Vanilla Visa cards sometimes have a 10x bonus points promotion.

Remember, non-Visa and Mastercard gift cards can’t be used at the ATO online. Some EFTPOS gift cards can be used at Australia Post to pay ATO bills.

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When does it make sense to use a prepaid gift card?

1. When there is a bonus points offer

The best points opportunities are when Coles or Woolworths runs a bonus offer on gift cards.

A popular Coles Mastercard gift card offer is a fixed 2,000 bonus Flybuys points per card on the $100 and $250 denominations (up to five cards in an offer period). With a $5 or $7 purchase fee per card, respectively, you could earn 10,000 Flybuys points for $25-$35 in fees. That’s equivalent to 5,000 Velocity Points.

Over at Woolworths, you might occasionally see 10x bonus Everyday Rewards points on Visa Vanilla gift cards, including the variable load card. You could buy two $500 cards and earn up to 10,000 Everyday Rewards points for $15.90 in fees. That’s equivalent to 5,000 Qantas Points.

Bonus points can add up fast, particularly on variable load Visa and Mastercard gift cards.

Anyone can purchase these deals from the supermarket – a credit card isn’t required. But if you do have a points-earning credit card, be sure to use it for even more points!

2. When there is a ‘no purchase fee’ or cash discount offer

It’s not as lucrative for point hackers, but even if there are no bonus points, buying these Mastercard and Visa gift cards can still be worth it if you have a points-earning credit card and the purchase fee is waived, or there is a cash discount (e.g. 10% off).

That’s because you’re still able to pay the ATO with no fee, while earning full credit card points on the purchase of these gift cards. Waiving the purchase fee or enjoying 10% off is the cherry on top and might even put you ahead by paying less than the gift card’s value!

What if there’s no offer at all?

We’d always recommend waiting for some type of promotion to maximise the value from these cards. But if your ATO bill can’t wait, it could still be worth buying these full-price gift cards to earn credit card points. This works better for higher denomination or variable load cards, as you’ll get more points for the fixed fee.

You’ll need to run the sums to see how many points you’ll get and what it’s worth to you. This option probably only makes sense with the highest points-earning reward credit cards, such as American Express cards. On cards with a lower earn rate, the points earned might not outweigh the cost of the fee.

Summing up

If you’re settling a personal ATO bill under a few thousand dollars, buying prepaid Mastercard or Visa gift cards could be a great way to score lots of bonus points for very little in fees.

The primary constraints are the limited number of offers a year, the cap on the number of cards you can buy or points you can earn in a week, and the stock availability for physical gift cards – these can be snapped up very quickly. There’s also the risk of tampering with physical cards, so be sure to examine every card closely.

Using a third-party payment processor such as Pay.com.au could be more efficient and rewarding for those with more significant business expenses and ATO bills.


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How to earn points at the ATO with low (or no) fees was last modified: January 6th, 2025 by Brandon Loo