how to file taxes as a small business in australia

Australia has several different tax brackets that apply to individual and business taxpayers. Each one of these tax brackets has its specific rates. However, there are some differences between businesses and individuals. The information below will help you understand various tax brackets and how to file taxes. Business tax rates in Australia are different from personal income tax rates.

Business tax brackets depend on income. If you are a sole owner, you will need to file taxes as an individual, and you will need to register with the ATO. If you own a business, you should register as a sole owner or partner. You can file your taxes online with the help of an online business tax accountant in Perth.

What is a Small Business in Australia?

A small business in Australia is defined as any enterprise with an annual turnover of less than $2 million. It includes retail stores, restaurants, service providers, consultants, freelancers, and other professionals. As a small business tax filing in Australia, you should submit annual income tax returns and pay the relevant taxes to the ATO. Small business tax return Australian tax rates for businesses depend on the size of your business. 

Generally, a small business in Australia consists of four or fewer employees. This type of business is eligible for various incentives from the government, such as tax deductions and business grants. It is essential to check with the small business tax ATO for specific eligibility criteria for your type of business.                                                                       

How Will You File Taxes For a Business?

business tax rates in Australia

  1. If you have a limited liability business, have your registration number printed on the ATO form. File corporate taxes online with Tax and Accounting Australia.
  2. Business taxes in Australia depend on the turnover of the business. When filing taxes, you must ensure that all expenses, deductions, and profits are accurate. Additionally, you must ensure that you only claim the deductions and expenses that apply to your business.
  3. Check with business tax help counselors because it ensures you are paying the correct amount and won’t be held liable for unpaid taxes.
  4. A sole proprietor should register with the ATO using their Tax File Number (TFN). All businesses regardless of size and type should have an Australian Business Number (ABN).
  5. Additionally, you can register your company as a limited liability company (LLC) or a corporation. The difference between the two is that a corporation pays taxes itself and not on the individual’s tax return.
  6.  Register for GST, PAYG withholding, and other relevant taxes. It is also important to note that you may be required to register for additional taxes depending on the company you own.
  7. A public company must have its corporate registration number printed on every invoice issued by them.

Taxes for Small Business Owners in Australia

  • Goods and Services Tax

GST is a tax that applies to most goods and services in Australia. For small businesses, GST is charged on the sale of goods and services and gets notified on the business’ tax return. Companies with an annual turnover of more than $75,000 must register for GST, but companies with a yearly turnover of less than $75,000 are not required to do so. GST is charged 10% and must be paid every quarter.

  • Pay-as-you-go (PAYG) 

PAYG withholding works for small businesses in that it requires employers to deduct an amount from employees’ wages or salaries and deposit it with the Australian Taxation Office. This system allows the ATO to collect taxes from employees regularly, which helps to ensure that employees are paying the correct amount of tax throughout the year. It also helps small business owners in tracking their employees’ tax payments and submits them timely. Employers may be required to submit charges monthly, quarterly, or annually, depending on their payroll size, and any late payments may incur penalties.

  • Payroll Tax

Payroll tax is imposed on businesses when they pay wages to their employees, and the amount of tax paid depends on a percentage of the total wages paid. The payroll tax applies to businesses with a payroll size over a certain threshold, and the exact threshold varies from state to state. It is a state-based tax managed by the state or territory governments. Payroll tax is different from PAYG withholding. Payroll tax depends on the total amount of wages. Companies with larger payrolls will have to pay higher amounts of payroll tax. 

  • Capital Gain Tax

Capital Gains Tax (CGT) is charged on the disposal of certain assets, primarily investments and business assets. This tax is charged at either 10 or 15 percent, depending on the type of asset sold. CGT forms part of the Australian Taxation Office’s (ATO) taxation regime. CGT is separate from income tax and can be complicated to calculate and pay. When filing your taxes, you should include the profits earned from the assets minus any costs associated with the sale.

  • Company Tax

All companies operating in Australia must pay company tax on their assessable income. The rate is currently 30%, although, for small businesses, the tax is decreased to 27.5%. Companies must lodge a company tax return with the Australian Taxation Office (ATO) and pay their company tax within the due date. Companies must also keep records of their income and expenditure to ensure they are paying the correct amount of tax. Failure to pay company tax or lodge returns on time may result in a penalty or prosecution.

Deductions to Claim in Small Business Tax Return

Tax relief for small businesses is planned to encourage companies to invest in new equipment or expand their business. The tax deduction scheme provides businesses with a tax advantage for doing so. There are different types of deductions for various types of assets. Some common types of deductions include:

  • Travel Expenses

Businesses can claim deductions for travel expenses incurred by their employees for business-related activities. It includes transport, accommodation, and meals. If an employee is required to travel for business purposes and the employer pays for their expenses, the employer may be able to claim the costs as a deduction. It is necessary to keep records of the expense details such as the dates of the trip, the purpose of the trip, and the costs incurred. These records prove that the trip was for business purposes and that the costs were necessary.

  • Home Office

Home office deductions. Employees who work from home claim deductions for the costs of running their home office. It includes expenses such as electricity, internet, and office supplies. The expenses must be directly related to running the home office and must keep as a record.

  • Tax Management Costs

Employees may also be able to claim deductions for tax management costs. It includes costs like accountancy fees, tax preparation fees, and other expenses related to managing their tax affairs. These expenses must be reasonable, and the business must have received a benefit from them.

  • Maintenance Charges

Employees may be able to claim deductions for maintaining their business premises. It includes the costs of repairs, cleaning costs, furniture, and equipment. For these deductions, employees must prove that the maintenance costs were necessary and directly related to their business activities.

  • Insurance Premiums

Employees may also be able to claim deductions for insurance premiums. These deductions cover the cost of business insurance policies, such as liability insurance or key person insurance. 

What Are The Benefits of Regularly Filing Your Taxes?
benefits of regularly filing your business taxes

  • Register your business with ATO so that you can claim tax deductions.
  • You get a tax file number for many government services, including getting a credit card and opening an online bank account.
  •  By filing taxes for small businesses annually, you can avoid any potential problems with the IRS. In addition, these taxes may help you save money in the long run.
  • Small businesses that include the best small business accountant perth or tax professional on their payroll are typically better able to file accurate tax returns and receive deductions. Business Advisor Perth also reduces the risk of overpaying your taxes due to inaccuracy.
  • Business taxes in small business Australia are more complicated than any other type of tax filing. Company employees should prepare files to pay their federal income tax due, even if they have no money or no profits or losses. 
  • Small businesses are at high risk of needing to be properly audited. These audits are infrequent and based on forms with limited information, which often results in fines and penalties. Filing quarterly can ensure accurate and complete documentation of your business activities.


If you’re a small business owner, you probably want to know what it takes to file your taxes as a small business in Australia. The good news is that there’s no need for complex knowledge or expensive software to follow simple steps. If you own a company, fill out different forms and submit them at the end of each year. Small business tax benefits include lower rates on income tax, a simple process of filing your taxes, and more access to grants and loans if needed. 

Do not take the chance of delaying the tax season and losing money by not filing on time. You can also file taxes online with the help of professional services like Perth taxation service. Prepare for the next tax season and avoid penalties by filing your taxes early. When you pay your taxes timely and file them correctly, you can get better results. Keep track of your finances and avoid any fines.

Australian tax laws can be challenging to understand at first time but with professional help, you can get the best results possible and avoid any further complications.

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