What are the Different Types of Business Taxes in Australia?
Running your own business is exciting - but let’s be real, taxes can be confusing.
If you’re an entrepreneur juggling a side hustle, startup, or small business, understanding the different types of business taxes in Australia is essential.
Getting it right keeps you compliant, helps you avoid nasty surprises, and can even save you money. Here’s a friendly, straightforward breakdown of the main business taxes you should be aware of if you’re operating in Australia.
1. Income Tax
Every business in Australia has to pay tax on profits. How much you pay depends on your business structure:
Sole traders and partnerships: Profits are taxed at your personal income tax rate.
Companies: Profits are taxed at the corporate rate (usually 25–30%).
Tip: Keep track of your income and expenses throughout the year. Staying organised makes tax time way less stressful.
2. Goods and Services Tax (GST)
If your business earns $75,000 or more per year, you must register for GST. This means charging 10% on most goods and services you sell.
You’ll lodge a Business Activity Statement (BAS) monthly or quarterly to report GST collected and paid.
Even if you’re a smaller business below the threshold, voluntarily registering for GST can sometimes make sense - especially if you deal with other businesses that can claim GST credits.
3. Payroll Tax
Payroll tax is a state-based tax applied to wages you pay employees. It only kicks in if your total wages exceed the threshold in your state or territory.
Example: In New South Wales, the threshold is currently $1.2 million.
If your business is small and your payroll is under the threshold, you won’t need to worry about this one yet.
4. Fringe Benefits Tax (FBT)
FBT is a tax on certain perks you provide to employees - things like company cars, entertainment, or even discounted loans.
The employer pays FBT, not the employee.
It’s separate from income tax and calculated on the taxable value of the benefit.
FBT can get tricky, so most small business owners get help from an accountant or Virtual CFO to avoid paying too much.
5. Superannuation
While not technically a tax, superannuation is a legal obligation if you have employees. You need to contribute at least 12% (as of July 1, 2025) of an employee’s ordinary wages into a super fund.
Missing super contributions can lead to penalties, so it’s worth staying on top of this one.
6. Tips for Running a Business
Stay organised: Use accounting software like Xero, QuickBooks, or MYOB to track income, expenses, and GST.
Claim all eligible deductions: Think home office, travel, software subscriptions, marketing - these all reduce your taxable income.
Seek advice early: Even a short consultation with an Tax Agent, Accountant or Virtual CFO can save you headaches and money down the track.
Plan ahead: Don’t wait until the end of the financial year - forecast your tax obligations and cash flow monthly.
Final Thoughts
Taxes might not be glamorous, but understanding them is part of running a smart, modern business. By knowing the different types of business taxes, staying organised, and getting the right advice, you can focus on growing your business without letting the taxman stress you out.
Remember: the right tools and guidance can turn tax from a headache into a strategic advantage.
If you run a business in Australia and need help understanding your tax obligations, we can help.
