Australia Accounting & Tax Glossary

The Australian Business Number is an 11-digit identifier issued to businesses by the Australian Business Register. Without an ABN, payers must withhold 47% from your invoice. Required for GST registration, business name registration, and most B2B trading.

The Australian Company Number is the 9-digit identifier ASIC issues to every registered Australian company. It must appear on company stationery, websites, and public documents. Companies also have an ABN; the ABN typically incorporates the ACN.

The Business Activity Statement is the quarterly (or monthly for large businesses) form Australian businesses use to report and pay GST, PAYG withholding, PAYG instalments, FBT instalments and Wine Equalisation Tax. Filed via myGov, ATO Online, or accounting software.

A proprietary limited company is the most common Australian business entity. Owners' liability is limited to their share capital, and the company is a separate legal person. Maximum 50 non-employee shareholders. Must have at least one Australian-resident director.

A sole trader in Australia operates the business in their own name (or a registered business name) with unlimited personal liability. Income is taxed as personal income via the individual tax return. Sole traders need an ABN, and may register for GST if turnover exceeds A$75,000.

Company Tax is the federal tax Australian companies pay on taxable income. The base rate is 25% for 'base rate entities' (turnover under A$50 million and ≤80% passive income). All other companies pay 30%. There is no separate state-level company tax.

GST is a flat 10% tax on most goods, services and other supplies in Australia. Businesses with turnover of A$75,000+ (A$150,000 for non-profits) must register and remit GST quarterly via the Business Activity Statement (BAS).

PAYG Instalments are advance company tax (or income tax for sole traders) paid quarterly via BAS, calculated by the ATO based on prior year tax. Reduces the year-end tax balance.

The Tax File Number is a 9-digit personal tax identifier issued by the ATO. Every Australian taxpayer needs one to lodge tax returns, receive Medicare, and avoid having tax withheld at the top marginal rate (47%). Companies have a separate company TFN.

Pay As You Go Withholding is the system Australian employers use to deduct tax from employee wages and remit to the ATO. Real-time reporting via Single Touch Payroll (STP) Phase 2 is mandatory at every pay event. Cash flow remittance is via BAS (quarterly or monthly).

Single Touch Payroll Phase 2 is the ATO's mandatory real-time payroll reporting system. Employers send pay information (gross pay, tax, super, allowances categorized) to the ATO with each pay event. Annual finalisation is due 14 July each year.

Mandatory employer contribution to an employee's superannuation fund. The rate is 11.5% of ordinary time earnings for FY2024–25, rising to 12% from 1 July 2025. Must be paid quarterly by the 28th of the month following each quarter.