Turning Tax into Travel: How Dentists Can Earn Frequent Flyer Points from ATO Payments

Introduction

For years, dentists have quietly paid tens, if not hundreds of thousands of dollars each year in ATO, superannuation, insurance and supplier obligations, often via direct debit or BPAY. But what if you could turn that spend into flights, upgrades or even a family holiday?

Thanks to evolving payment platforms and the Australian Taxation Office’s acceptance of card payments, dentists can now legally and effectively earn frequent flyer points on many of their practice outgoings, including tax payments. Done correctly, this can be a smart financial optimisation tool, not a gimmick.

Yes, You Can Pay the ATO with a Credit Card

Despite what some may believe, the ATO does accept credit card payments. You can pay your BAS, PAYG withholding, income tax, superannuation guarantee charge and other obligations directly using Visa, Mastercard or American Express. The ATO charges a modest processing fee, but for many practices, the value of the points earned far exceeds the cost.

In addition to tax obligations, everyday practice expenses like insurance, consumables, utilities, and even some rent payments can be paid using credit cards, depending on the supplier’s setup.

Introducing Sniip: One Platform, More Points

While paying the ATO directly by card is possible, some dentists are using a platform like Sniip to optimise their reward outcomes.

Sniip is an Australian mobile payment platform that enables you to pay any bill with any credit card, even where the biller doesn’t accept card payments directly. This includes government obligations, superannuation, and suppliers that would otherwise insist on bank transfers. More importantly, Sniip ensures you earn full frequent flyer points on eligible spend, even with cards that typically exclude government payments.

Some key features of Sniip:
– Accepts Amex, Visa, Mastercard, Citibank and Diners Club
– Partners with Virgin Australia Business Flyer, earning 1 Velocity Point per $10 on eligible business payments
– Competitive fees (starting from 1.75% for ATO/super)
– Allows the use of high-earning reward cards for outgoings that otherwise wouldn’t generate points

Are These Points Taxable? No – And Here’s Why

A common question we get from clients is whether the points earned are assessable income. The short answer is no, provided the points are not converted to cash and are not part of a salary sacrifice or remuneration arrangement.

The ATO’s own ruling, TR 1999/6, confirms that frequent flyer points earned through business expenditure are not taxable if:
– They arise incidentally (e.g., from normal credit card spend)
– They are not paid in lieu of salary or fees
– They are not converted into cash or cash equivalents

As long as you’re not being reimbursed by your company for using your personal card (or receiving the points as a fringe benefit in lieu of remuneration), you’re in the clear.

Real Value: What the Points Could Be Worth

Let’s break this down.   
If your practice pays $300,000 per year in ATO, super, suppliers and consumables and these are paid via a rewards card through Sniip or directly, you could be earning:
– 300,000 Qantas or Velocity Points on a 1:1 earn card
– Enough for two international business class return flights to Singapore or Tokyo
– Or a family of four flying return to the Gold Coast in school holidays

That’s real, tax-free travel value derived from obligations you’re already meeting. It’s a way of turning overhead into opportunity.

Reward Points Comparison: Amex vs Qantas-Linked Visa

Card Type	Example	Earn Rate (Government Spend)	Point Flexibility
Classic / Platinum Amex	Amex Business Explorer, Platinum	Up to 1.0 point / $1*	Transferable to 8+ frequent flyer programs
Qantas-linked Visa / Mastercard	NAB Qantas Rewards, ANZ Frequent Flyer	Typically 0.3 – 0.5 points / $1**	Locked to Qantas Frequent Flyer program

* Depends on card tier and spend category. Some government payments may earn reduced rates unless routed via Sniip.

** Most Qantas-linked cards reduce or exclude earn on ATO/super/insurance payments.

Choosing the Right Card: Why I Recommend Amex Platinum

And no – I don’t work for American Express (although at this point, perhaps they should start paying me commissions!)

Over the years, I’ve reviewed dozens of credit cards on behalf of dental practitioners, and one that consistently stands out is the Classic or Platinum American Express.

Why? The key advantage lies in point flexibility. Unlike cards that lock your earned points into a single frequent flyer program, Amex Membership Rewards points remain on the card, giving you the freedom to transfer them to a wide range of airline programs, including Singapore Airlines KrisFlyer, Emirates Skywards, Air New Zealand Airpoints, and more.

This flexibility is particularly valuable if you:
– Want to optimise redemptions across different airlines for better value
– Plan family travel where alliance availability may vary
– Don’t want your reward program tied to a single carrier’s pricing and seat availability

Additionally, American Express generally offers strong earn rates, especially when paired with platforms like Sniip, and its premium card tiers often include complimentary insurances, lounge access, and travel credits. The annual fee is higher than most mainstream cards, so it’s best suited to practitioners with consistent spend who can make full use of the benefits.

Compare Before You Commit

Before applying for any card, practitioners should compare annual fees, earn rates, point caps, and reward flexibility. Websites like Canstar, Finder and Mozo offer up-to-date comparisons of business and personal rewards cards tailored to different spend levels and objectives.

From 1 July 2025, interest paid to the Australian Taxation Office will no longer be tax deductible. Previously, businesses could claim a deduction on interest incurred under payment plans for tax debts. This change removes a common relief tool for many small businesses who needed to smooth out cashflow over several months.

In light of this, the strategic use of a credit card (particularly one with an interest-free period of up to 55 days) may provide a short-term cashflow buffer. This should only be considered where the business is financially sound and the card can be paid off in full by its due date – otherwise, the interest cost will quickly outweigh any point benefit.

While it’s not a substitute for strong cashflow planning, using a points-earning card with a disciplined repayment approach can be part of a broader financial strategy in a post-deductibility world.

Interest No Longer Deductible – Another Reason to Consider Cards

 

Final Thoughts: Points with Purpose

This isn’t about playing the points game for ego. It’s about extracting value from your existing cost base. For dentists, especially those running practices with material quarterly ATO obligations, this can mean thousands of dollars in travel benefits every year.

With the right structure, card choice and payment platform, you can turn compliance into comfort or even into a first-class upgrade.

About the author

Heath Stewart, CA, B.Com, M.Tax, CTA, Dip.FS (FP)

Chartered Accountant and Director
Ecovis Clark Jacobs

Heath Stewart specialises in advising dentists on everything from practice purchase and sale to planning, insurance, and financial wellbeing. For a free assessment of your financial position and to see how you can achieve your goals, contact Heath on (02) 9264 1111.

Disclaimer

This article is for general information purposes only and is not financial advice. Readers should seek advice from a qualified professional to ensure any strategy is appropriate to their circumstances. All data is current at the time of publication, but subject to change.