Tax Compliance for Businesses in Australia

Running a business is busy enough without tax surprises. This guide explains tax compliance for businesses in Australia in plain English, with clear steps, dates, and checklists you can use right away. It also points you to tools and support if you want a partner to keep everything on track.

Quick Summary

• Registrations: ABN, TFN, GST when turnover hits the threshold, PAYG withholding if you have staff, and a director ID if you are a company director.
• Core obligations: Lodge BAS, pay GST, withhold and report PAYG, meet Single Touch Payroll rules, pay super at the current rate, and lodge income tax returns.
• Other regimes: Fringe Benefits Tax, payroll tax (state), and the Taxable Payments Annual Report if you pay contractors in certain industries.
• Records: Keep accurate, readable records for at least five years, preferably digital.
• Calendar: Note the due dates for BAS, super, PAYG, FBT, TPAR, and annual returns.
• Risk control: Use reconciliations, evidence files, and internal checks to reduce ATO audit risk.
• Get help: Outsource bookkeeping, BAS, and advisory to stay compliant and free up your time.

What Does “Business Tax Compliance” Mean?

Business tax compliance is following Australia’s tax, super, and reporting rules for your structure and activities. In practice, that means:

• Registering for the right taxes
• Keeping complete and accurate records
• Lodging the right forms on time
• Paying the right amounts by the due dates
• Fixing errors quickly if they occur

Think of it like road rules for your finances. When you drive within the lines and signal early, you avoid fines, stay safer, and reach your destination without stress.

Learn more: What is compliance in accounting?

Step 1: Get the Set-Up Right

1) Choose the Structure and Register

• Sole trader, partnership, trust, or company. Each has different obligations and tax rates.
• ABN and TFN as required.
• Director ID if you will be a company director. Apply online with ABRS before appointment.

2) Register for GST When Required

• You must register when your GST turnover is $75,000 or more, or if you provide taxi or ride-sourcing, regardless of turnover.
• You can register earlier if it suits cash flow and customer expectations.

Example: If your online store is tracking to $80,000 in the first 12 months, register for GST before you cross the line so you can charge 10 percent GST and claim credits correctly from day one.

3) Register for PAYG Withholding if You Have Staff

This lets you withhold tax from employee wages and remit it to the ATO. You will also need Single Touch Payroll compliant software.

Step 2: Know Your Core Obligations

A) Business Activity Statements (BAS) and GST

• Monthly BAS is due on the 21st of the following month.
• Quarterly BAS is generally due 28 Oct, 28 Feb, 28 Apr, 28 Jul. Extra time may apply if you lodge online or via a registered agent.

What to include: GST collected, GST credits, PAYG withholding, PAYG instalments, and other items as they apply to you.

B) Company Income Tax Rates

• Base rate entities apply 25 percent from 2021–22 onwards.
• All other companies apply 30 percent. Eligibility depends on turnover and passive income tests.

C) Single Touch Payroll (STP)

• Report payroll and withholding on or before payday using STP-enabled software.
• STP Phase 2 expands what you report, including income types and child support.

D) Superannuation Guarantee

• Minimum employer super is 12.0 percent of ordinary time earnings from 1 July 2025.
• Pay at least quarterly by the due dates to avoid the Super Guarantee Charge.

Example: If you pay an employee $5,000 in ordinary time earnings for a month in August 2025, the minimum super you must contribute is $600.

E) Fringe Benefits Tax (FBT)

• Applies when you provide benefits like private use of a company car, parking, entertainment, or certain allowances.
• FBT year runs 1 April to 31 March with lodgment after year-end. Keep proper records for categories and exemptions.

F) State Payroll Tax (If Applicable)

• In WA the rate is 5.5 percent with a diminishing threshold across $1m–$7.5m annual taxable wages. Registration rules and grouping can apply. You will need to check your state.

G) Taxable Payments Annual Report (TPAR)

• If you pay contractors in certain sectors, you must lodge a TPAR by 28 August. Sectors include building and construction, cleaning, courier, road freight, IT, and security.

Step 3: Record Keeping That Actually Works

The ATO requires accurate, complete, legible records in English or easily converted, kept for at least five years. Digital records are acceptable and recommended.

Must-Haves

• Sales tax invoices and receipts
• Expense tax invoices and payment proof
• Payroll, super, leave, and STP records
• Asset registers and depreciation schedules
• Motor vehicle logbooks where required
• Stocktake records if relevant
• Working papers supporting adjustments

Practical tip: Use cloud accounting and a receipt capture app. Create a monthly “evidence pack” folder that stores BAS workpapers, bank rec screenshots, PAYG and super confirmations, and any unusual judgement calls. This speeds up reviews and reduces audit risk.

A Simple Compliance Calendar

BAS timing and extensions reference: ATO. (Australian Taxation Office)

Common Problem Areas and How to Fix Them

1. Missing GST on sales or claiming ineligible credits Match every BAS to a reconciliation of your GST control accounts. For large credits, keep a short memo of why.
2. Late super Set automated super payments aligned to each payroll cycle. The rate is 12.0 percent from 1 July 2025.
3. Incorrect payroll classifications STP Phase 2 needs proper income types and allowances. Review your payroll item mapping once and document it.
4. FBT blind spots Car benefits, parking, and entertainment need records and policy decisions. Complete an FBT pre-year-end review each February.
5. TPAR forgotten Add a July reminder and check if you pay contractors in the reportable sectors. Lodge by 28 August.
6. State payroll tax grouping If you run multiple entities, test for grouping rules and combined thresholds. In WA, use the state guidance to verify calculations.

Checklists You Can Use

New Business Checklist

• Choose structure and set up ABN and TFN
• Apply for director ID if a company director
• Register for GST if you are at or will exceed the threshold
• Register for PAYG withholding and set up STP software
• Choose an accounting system and a receipt capture tool
• Set a monthly close process with reconciliations and a BAS evidence pack
• Create payroll, super, and expense policies
• Citations for director ID and GST threshold rules. (abrs.gov.au)

Monthly Close Checklist

• Reconcile bank, payables, receivables, payroll clearing, GST accounts
• Review large or unusual transactions
• File supplier invoices and attach to entries
• Prepare BAS workpapers and lodge by due date if on monthly cycle
• Pay super if you align payments with each pay cycle

Year-End Checklist

• Stocktake and asset register review
• FBT review for the year ended 31 March
• TPAR data extraction and review
• Income tax workpapers, adjustments, and notes
• STP finalisation through your software

How Rules Change and How to Keep Up

• Company tax rates can vary by eligibility as a base rate entity. Test this every year.
• Super rates are now at 12.0 percent from 1 July 2025, following the staged increases.
• GST threshold remains $75,000 at the time of writing. Policy proposals sometimes float, but you should follow the ATO’s current rules until the law changes.

Reduce Audit Risk With Smart Controls

• Document positions: When you make a judgement call, write one paragraph explaining the basis and keep it with your BAS or tax file.
• Three-way match: For big purchases, match the invoice, bank payment, and fixed asset entry.
• Separate accounts: Keep business and personal spending separate to avoid messy reconciliations.
• Independent review: Have a second pair of eyes review BAS and year-end files.
• System access: Restrict who can create new suppliers or change bank details to reduce fraud risk.

For extra comfort, see our guide on ATO audits and how we help clients prepare and respond.

Learn More: ATO Audit Guide.

Industry-Specific Add-Ons

Some industries have extra rules. Examples include:

• Construction, cleaning, courier, IT, road freight, security: TPAR by 28 August.
• Not-for-profits: Concessions for FBT may apply.
• Government-funded projects: Tight contractor and payroll controls are often required by contract.

Tools and support to make it easier

• Cloud accounting and add-ons: Automate bank feeds, invoice capture, payroll, and super.
• Registered BAS/tax agents: Lodgment program extensions can apply and reduce stress at quarter end.
• Advisory and outsourced CFO: Forecast tax, plan cash flow, and manage risks before they become problems.

FAQs

What is the GST threshold for registration?

$75,000 in GST turnover for most businesses. Ride-sourcing must register regardless of turnover.

What is the company tax rate?

25 percent for eligible base rate entities and 30 percent for others. Test eligibility every year.

What is the current super rate and when is it due?

12.0 percent from 1 July 2025. Pay at least quarterly by the ATO due dates.

Do I need to lodge a TPAR?

If you pay contractors in certain industries, yes. The report is due 28 August.

How long do I need to keep records?

At least five years, in English or easily converted. Digital records are encouraged.

What if I miss a deadline or make a mistake?

Lodge or amend as soon as possible. The ATO is generally more lenient if you act quickly and keep good records.

Final Word

Good compliance is not about ticking boxes. It gives you clean numbers for better decisions, protects cash flow, and reduces risk. If you would like a partner who is friendly, proactive, and transparent on fees, we are here to help.

At M2 Corporate, we pair practical bookkeeping and BAS support with proactive advisory. Our team has been recognised with national accounting award wins and finalist nods, and we are a Xero Gold Partner, which reflects the depth of our cloud expertise.

Ready to strengthen your tax compliance? Get in touch with our business advisors in Perth and book a free, no-obligation consult.