Small business tax in Australia

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Tax is one of the biggest costs, and biggest sources of stress, for a small business owner. The good news: once you understand the moving parts, it becomes predictable. This guide walks through the essentials in plain English, and links to deeper guides for your situation. It's general information, not personal advice, so check your own circumstances with a registered tax agent.

1. Choosing a business structure

Your structure, sole trader, company, trust or partnership, drives your tax rate, your paperwork, and how protected your personal assets are. There's no single right answer; it depends on your income, risk and plans.

Sole trader: simplest and cheapest. You and the business are one for tax, and profits are taxed at your personal rates. If you're registered for GST, you're effectively running a business, see our pricing for how we treat that.
Company: a separate legal entity with a flat tax rate (25% for most small companies, see rates below) and asset protection, but more cost and admin.
Trust: flexible for distributing income across a family group, but more complex to run.

Getting this right early saves money and pain later. We cover it in every advisory engagement and it's a common reason people switch accountants.

2. Registering: ABN, GST & PAYG

Most businesses need an ABN. You must register for GST once your turnover reaches $75,000 (or you expect it to), which means charging 10% GST and lodging a BAS. If you employ people, you'll also register for PAYG withholding and pay super. Setting a new company up correctly, ABN, TFN, GST, PAYG and Director IDs, is a one-off job we do regularly.

3. What you can claim

You can claim expenses that genuinely relate to earning your income, as long as you weren't reimbursed and you keep a record. What's deductible varies a lot by industry, which is why we've written specific guides:

Builders & construction, electricians and plumbers
Cafés & hospitality and retail & e-commerce
Hair & beauty, allied health and consultants
See all industries we work with

Employees have their own deduction rules by occupation, from tradies to nurses, teachers and office professionals.

4. BAS, GST & lodgements

If you're registered for GST, you lodge a Business Activity Statement, usually quarterly, reporting the GST you collected and paid. Coding it correctly is where most mistakes happen. We handle BAS & GST and keep your bookkeeping clean so it's accurate every time. As a registered tax agent, we can also secure you extended lodgement deadlines.

5. Tax planning

The biggest mistake we see is treating tax as a once-a-year event. The levers that actually reduce tax, timing income and purchases, super contributions, the instant asset write-off, structure, mostly have to be pulled before 30 June. That's what proactive tax planning is for. Read our guide to smart tax planning and the EOFY checklist.

6. Key 2025-26 rates & dates

GST registration threshold: $75,000 turnover.
Company tax rate: 25% for base rate entities (turnover under $50M, mostly active income), otherwise 30%.
Super guarantee: 12% from 1 July 2025. Payday Super starts 1 July 2026.
Instant asset write-off: $20,000 for 2025-26 (to 30 June 2026).
Quarterly BAS: generally due 28 days after quarter end.

For the full run-down, see tax changes for 2025-26.