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The basics of business tax

Read our quick guide to the basic types of tax that apply to most types of businesses.

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All Australian businesses (excluding hobbies) are required to be registered for various taxes, depending on your size and operations. This can also include your side hustle or activities in the sharing economy.

With the end of the financial year (EOFY) now upon us, it’s important to be aware of tax reporting requirements as well as lodgment and payment due dates.

Here's a basic guide to get you started.

Types of business taxes

There are several types of taxes that apply to most Australian businesses.

Income tax: This refers to the tax paid on a business’s assessable income, minus allowable deductions or expenses. Income tax is generally paid during the year in instalments (known as PAYG instalments).

Goods and Services Tax (GST): If you sell goods or services and your business’s turnover is $75,000 or more per year ($150,000 for a not-for-profit), you must register for GST and lodge a regular Business Activity Statement (BAS).

Pay-As-You-Go (PAYG) withholding: This is where you remit taxes that have been withheld from other parties, such as the tax deducted from your workers’ gross wages.

Other taxes: Other taxes may apply, depending on the business. For example, payroll tax, fringe benefits tax, wine equalisation tax (WET), luxury car tax (LCT), and fuel tax credits.

When to lodge and pay your taxes

For most businesses, the BAS is the most common and regular type of tax reporting throughout the year.

As well as the GST you have collected and paid, the BAS usually includes PAYG instalments and PAYG withholding (as well as WET, LCT and fuel tax credits if these apply).

Businesses lodge the BAS either quarterly or monthly. Businesses with a GST turnover of $20 million or more need to report and pay monthly, while those under the $20 million threshold may report quarterly or monthly. 

For those lodging monthly, the due date is usually the 21st of the month following month-end. So, for July it will be August 21.

The quarterly BAS due dates are as follows.

Quarter ending:

  • June 30 – due July 28
  • September 30 – due October 28
  • December 31 – due February 28
  • March 31 – due April 28

For quarterly reporting, if you lodge online you may qualify for an extra two week extension for lodgment and payment.

Tips to make BAS simpler

There are a few things you can do to streamline the BAS process:

  • Payments – it’s a good idea to put money for your BAS bill into a separate account each week or month to avoid ‘BAS bill shock’. If you are still unable to pay on time, you should contact the ATO to discuss arrangements. You must still lodge the BAS on time though.

  • Lock your past accounting periods – your BAS covers a certain accounting time period (such as a month or quarter). So once you have lodged it, you should ‘lock’ that time period on your accounting system to prevent further changes.

  • Do a year-end check – run yearly reports and BAS statements on your system to check all the figures match for each quarter. If you encounter any differences, depending on the correction, you may be able to adjust on the final BAS, or you may need to lodge an amendment of an earlier BAS.

Income tax due dates

Lodgment due dates for income tax depend on the business and can be extended if you lodge through a registered tax agent.

  • Sole traders, partnerships and trusts must lodge by October 31.
  • Medium to large taxpayers, companies and superannuation funds usually have more time to lodge tax returns. For example, the due date for small company tax return lodgments and payments is currently February 28.

Income tax tips

These tips can help you avoid bill shock and make the most of your income tax deductions.

  • Use PAYG Instalments – if your tax bill is likely to be substantial, paying throughout the year in instalments helps prevent bill shock at year end. The amount you pay may vary depending on whether your profit is going to be higher or lower than expected.
  • Tax incentives – make sure to take advantage of available tax incentives such as the small business instant asset write-offs. This allows some businesses to claim the entire cost of assets as a tax deduction (currently up to $30,000 in value) in one go.
  • Purchase before EOFY – making allowable purchases before EOFY allows you to bring forward your tax deductions. However, don’t hurt your cash flow by making unnecessary purchases for the sake of a tax deduction.

It’s also a good idea to keep abreast of any changes the ATO brings in so you can take advantage of any new incentives. Likewise, don’t always assume that what was available last year will be the case this year!

Start planning for next year now

As well as gathering your figures and getting ready for tax lodgment time, it’s a good idea to start forward planning for next financial year. If this is something you need help with, your bookkeeper or accountant should be able to help you.


This article is intended to provide general information of an educational nature only. It does not have regard to your objectives, financial situation or needs and must not be relied upon as financial product advice. Newcastle Permanent Building Society does not provide tax or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax or accounting advice. You should consult your own tax or accounting advisors to consider whether it is appropriate for your circumstances.

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