A guide to company taxes

A company may have different tax responsibilities compared to other business structures (such as sole trader, partnership, trust). Understanding the basics of company taxes - what you should pay and when to pay them - is vital for business owners.​

You’ll need to pay tax on your company’s taxable income. To calculate the taxable income, you’ll use your gross income to subtract the expenses involved in running your business. In Australia, the base rate of entities is taxed at 25%, otherwise, 30% is applied. See more information on the ATO’s website.​

Generally, if you are lodging your own tax returns, the tax return and tax payable are due on the 31st of October. If you have a tax agent, there is a tax agent concession on the 15th of May the following year.​

However, there are exceptions to this based on the level of income and past lodgement performance.​

GST is another common tax companies may pay. It’s a tax added to most of the goods and services sold in Australia. The GST rate is 10%, but in certain situations, GST can be exempted or is zero-rated (0%).​

If your business’s annual turnover is over $75,000, you’ll be required to become GST registered. If your annual turnover is below this threshold, you can still choose to register for GST. This is called a voluntary GST registration.​

Once you’re registered for GST, you’ll also need to:​

You can choose to submit and pay your BAS returns on a monthly, quarterly, or annual basis.​

Check out our key tax year calendar for more important deadlines.​

If you’re interested to know more about GST, we have a number of blogs for you to read:​

The basics business owners need to know about GST​

How and when to register for GST​

GST on second hand goods​

10 common GST mistakes small business owners should avoid​

Simply put, ‘PAYG’ stands for ‘Pay As You Go’. It’s an acronym used for 2 different processes systemised by the ATO for businesses in Australia - PAY withholding and PAYG instalments.​

As an employer, you withhold income tax from an employee or contractor’s salary or wages - this tax is paid directly to the ATO on behalf of the employee or contractor.  Here below is what you need to pay and when you need to pay. ​

Small withholders​

Medium withholders​

Large withholders​

Pay as you go (PAYG) instalments are regular prepayments of the tax on your business or investment income. If you receive an instalment notice and pay the instalment amount, you don't need to lodge it – just pay the instalment amount by the due date.​

If you receive an activity statement and:​

​

Among the various company taxes, income tax, GST, and PAYG stand out as three major obligations to the ATO. However, there are other types of company tax returns you may need to file.​

For example, you may need to pay capital gains tax (CGT) if you gain profits from the sale of your business assets. If you provide company cars for your employees, you may be liable for fringe benefit tax (FBT). ​

Hiring an accountant (e.g. Beany) to handle your company's taxes can feel like a weight lifted off your shoulders. Tax laws are a bit of a maze, a good accountant can guide you through the ever-changing tax landscape and make sure you don't miss any deductions or end up with any surprises from the ATO. At Beany, we can handle your company taxes -  everything from BAS returns to PAYG, so you can focus on what you do best – running your business. Contact us or register today.​