Small Business Tax in Australia: The Complete 2025-26 Guide
Running a small business in Australia means dealing with more than one tax. Beyond income or company tax, you may need to handle GST, PAYG, payroll tax, FBT and super — each with its own rules and deadlines. This guide gives you a plain-English overview of what applies to you in FY 2025-26, and links a calculator for every one so you can put real numbers to it.
Not sure which taxes apply to you? It largely comes down to your structure (sole trader, partnership, company or trust), your turnover, and whether you employ staff. The sections below flag the triggers for each.
The taxes a small business faces
Income / company tax
How your profit is taxed depends on your structure. Sole traders pay tax at individual marginal rates; companies pay a flat rate — 25% for a base rate entity (aggregated turnover under $50M with no more than 80% passive income) or 30% otherwise.
GST
You must register for GST once your turnover reaches $75,000 ($150,000 for non-profits). You then charge 10% GST, claim credits on business purchases, and report on your Business Activity Statement (BAS).
Payroll tax
A state tax on wages, payable once your total wages exceed the state's annual threshold. Thresholds and rates differ in every state and territory, so a business operating across borders may be liable in more than one.
Fringe Benefits Tax (FBT)
Paid on non-cash benefits you give employees — company cars, entertainment, and similar. FBT is charged at 47% on the grossed-up value, and the FBT year runs 1 April to 31 March, separate from the income year.
Superannuation guarantee
You must pay super on top of wages for eligible employees. The Super Guarantee rate is 12% from 1 July 2025. Under Payday Super, contributions move to being due on each payday rather than quarterly.
Deductions & credits
Small businesses can reduce tax with the instant asset write-off, fuel tax credits on eligible fuel, and franking credits on franked dividends. Claiming these correctly can materially cut your bill.
Choosing the right structure
Your business structure is the single biggest driver of your tax position. A sole trader is simple and cheap to run but is taxed at personal marginal rates and carries personal liability. A company caps the tax rate at 25% or 30% and separates business risk from your personal assets, at the cost of more compliance. The right answer depends on your profit level and plans — the sole trader vs company calculator compares the two side by side for your numbers.
Key deadlines to keep in mind
- BAS lodgement — quarterly (or monthly) for GST and PAYG withholding.
- Super guarantee — moving to each payday under Payday Super. See our Payday Super guide.
- FBT return — the FBT year ends 31 March, separate from the income year.
- Income tax return — after 30 June, dates depending on whether you use a tax agent.
Behind on payments? The ATO payment plan calculator helps you model instalments, and the ATO audit risk scorer flags red flags before you lodge.
Frequently asked questions
How much tax does a small business pay in Australia?
It depends on your structure. A company pays 25% (base rate entity) or 30% on its profit. A sole trader adds business profit to personal income and pays individual marginal rates. On top of income tax you may also owe GST, payroll tax, FBT and super.
When do I have to register for GST?
Once your annual turnover reaches $75,000 (or $150,000 for non-profits), or immediately if you provide taxi or ride-share services. Below the threshold registration is optional.
What's the difference between a sole trader and a company for tax?
A sole trader is taxed at personal marginal rates and is personally liable for the business. A company is a separate legal entity taxed at a flat 25% or 30%, which can be more tax-effective at higher profits but adds compliance cost. The sole trader vs company calculator compares them.
Is the instant asset write-off still available?
Yes — eligible small businesses can immediately deduct the cost of qualifying assets under the current threshold rather than depreciating them over years. Confirm the current threshold and eligibility before you buy, as it is set year to year.
Put numbers to your tax
Start with the calculators most small businesses reach for first.
General information only, current as at July 2026 and based on ATO and state revenue office guidance. Rates and thresholds change — confirm current figures at ato.gov.au and your state revenue office, and seek advice from a registered tax agent before acting. This is not financial or tax advice.