Banking & Taxes For Business

Banking

Most banks offer business products, such as business accounts, cheque accounts, business loans and overdrafts. Products, fees and charges, and interest rates will differ from bank to bank, so it's worth shopping around before you decide who to approach. 

Before you approach your bank, however, you should register your business name and have obtained an ABN - this will make the process of getting set up much easier. Find out more about Business Registration.

Taxes

The Australian tax year runs from 1 July to 30 June. Once you have your Australian Business Number or ABN, you may need to register with the Australian Tax Office for certain tax payments. These include:

  • Goods and Services Tax
  • Fringe Benefits Tax
  • Pay As You Go withholding
  • Payroll tax

Goods and services tax (GST)

You must register for Goods and services tax (GST) if your business turns over more than A$75,000 per year or if you supply any taxi travel as part of your business.

The GST is a tax of 10 percent on a range of goods and services. When you register for GST, you collect GST on all your invoices by adding an extra 10 percent to the total amount on the invoice. Then you give the GST you have collected to the Australian Tax Office (ATO), less any GST you have paid to your own suppliers.

For more information on how to register for, collect and remit GST, visit the Australian Government's Business Gateway website or the ATO website.

Fringe Benefits Tax (FBT)

If your business has employees, and you pay those employees some of their salary or wages in goods or services (such as giving them a car, a car park, or paying some of their expenses for them), you must register for Fringe Benefits Tax (FBT). For more information on registering for and paying FBT, visit the Australian Government's Business Gateway website or the ATO website.

Pay as you go (PAYG)

If your business has staff or employees, you must register for Pay as you go (PAYG). PAYG is the system whereby you hold back part of your employees' wages or salary, and give it to the ATO, so that your employee does not get a big tax bill at the end of the financial year.

For more information about withholding PAYG, including how to register, when to withhold PAYG, how much PAYG to withhold and how to give it to the ATO, visit the Australian Government's Business Gateway website and the ATO website.

Other taxes

Your business must also pay tax on the profit it earns. If your business is small, this tax may be paid as part of your personal income tax each year. If your business is larger, or has a more complex structure, your tax requirements may be more complex.

The ATO provides some introductory information about tax for small business, but we would strongly recommend you seek the advice of an accountant or other business consultant, because the fines for not meeting your tax obligations can be very high.

Also See

Related Sites

Last updated: July 2009

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State Government of Victoria