Small business tax in Australia

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. Once you're registered for GST there's a BAS every quarter on top of the return, which is why my sole trader pricing splits at that point.
• 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. I 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 I 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 I've written specific guides:

• Builders & construction, electricians and plumbers
• Cafés & hospitality and retail & e-commerce
• Hair & beauty, allied health and consultants
• See all industries I 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. I handle BAS & GST and keep your bookkeeping clean so it's accurate every time. Being with a registered tax agent usually buys you more time to lodge. It is not automatic: it depends on when you come on board and whether earlier years are up to date, which is worth sorting early rather than in October.

5. Tax planning

The biggest mistake I 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 the 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 (aggregated turnover under $50M in that same year, and no more than 80% of assessable income passive), otherwise 30%.
• Super guarantee: 12% from 1 July 2025. Payday Super started 1 July 2026.
• Instant asset write-off: $20,000 per asset for businesses with aggregated turnover under $10 million using the simplified depreciation rules, with no end date since the measure was made permanent in August 2026. The asset must be installed and ready for use by 30 June of the year you claim it.
• Quarterly BAS: due 28 October, 28 February, 28 April and 28 July. That is 28 days after each quarter except the December one, which already has an extra month built in. Lodging through us usually buys more time on the other three, but not on December.

For the full run-down, see the recent tax changes.

Travis Krantz, CPA

Registered Tax Agent and founder of Summit Tax. Over a decade of experience helping small business owners take control of their finances.

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