Australia Accounting Questions Answered

How do I pay myself as a company director in Australia?

Australian company directors typically pay themselves via salary or director's fees (which require PAYG withholding and superannuation) or via franked dividends from company profits. Most use a combination of both to optimise their overall tax position.

What is PAYG withholding in Australia?

PAYG withholding requires Australian employers to withhold income tax from wages, salaries, and certain other payments before paying employees, then remit the withheld amounts to the ATO. This ensures employees pay their income tax progressively throughout the year.

What superannuation do I need to pay for employees in Australia?

Australian employers must pay superannuation guarantee (SG) contributions of 11.5% of an employee's ordinary time earnings in 2024-25 into a complying superannuation fund. Contributions are due quarterly, and failure to pay attracts the superannuation guarantee charge (SGC).

When do I need to register for GST in Australia?

You must register for GST in Australia when your annual turnover reaches or exceeds $75,000 (or $150,000 for non-profit organisations). Ride-sharing and taxi drivers must register regardless of turnover.

How do I lodge a BAS (Business Activity Statement) in Australia?

You lodge a BAS online through myGov or the ATO Business Portal, by mail, or through a registered BAS or tax agent. Most small businesses lodge quarterly, with the statement due 28 days after the end of each quarter.

What is the company tax rate in Australia?

The company tax rate in Australia is 25% for base rate entities (aggregated turnover under $50 million with no more than 80% passive income) and 30% for all other companies.

What is Personal Services Income (PSI) in Australia?

Personal Services Income (PSI) is income that is mainly a reward for your personal effort or skills. If your income is classified as PSI and you do not pass the relevant tests, special rules limit how you can use a company or trust to defer or split that income.

What business expenses can I claim in Australia?

Australian businesses can claim a deduction for any expense that is incurred in carrying on a business to produce assessable income, provided it is not private or capital in nature. Common deductible expenses include rent, wages, professional fees, insurance, marketing, subscriptions, and motor vehicle costs.

What is the small business instant asset write-off in Australia?

The instant asset write-off allows eligible Australian businesses to immediately deduct the full cost of qualifying business assets in the year of purchase, rather than depreciating them over several years. For 2024-25, the threshold is $20,000 per asset for businesses with aggregated turnover under $10 million.

When is the company tax return due in Australia?

Company tax returns in Australia are generally due by 31 October following the end of the income year (30 June). Companies using a registered tax agent receive extended deadlines, typically to 15 January or 15 March depending on their prior year status.