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June 14, 2016 at 3:24 am #994749Up::0
As a person who has not long started a business, I’m requiring a bit of help in the area of paying tax, and how this work with tax time.
I’ve been told that if a business earns under a certain amount, it is not required to pay tax, however, I’m unable to find anything on the ato website about how much tax a business is required to pay in any state.
Can anyone give me some advice on how much tax a business must pay. Is it 10% on labour or materials, or both? And it there a a certain amount a business earns before it is required to pay tax?
June 14, 2016 at 3:46 am #1198158Up::0From memory if its under 75K a year you dont need to pay. Correct me if im wrong im still learning too
June 14, 2016 at 4:37 am #1198159Up::0Thanks MGRik, I looked for this information on the ato website, however Ive found it a very useless website when it comes to finding business related information.
So if I were to set up a business bank account and have less than $75,000 coming in each year, which I do, I shouldn’t be required to pay tax.
Once I hit the 75k mark, I suppose I would be required to pay 10% of my total earnings?
And is PAYG the only or best way to pay tax? Do they supply BAS forms?
June 14, 2016 at 5:00 am #1198160Up::0Wow, The $75K number relates to registration for GST. And depending on your business, etc, you may decide to register for GST even if below $75K.
And any tax implications besides GST would depend on your business structure (sole trader, Pty Ltd, etc). And is than dependant on your income and expenses, and a heap of other things. Which is where you need an accountants advise. As there is insufficient detail in this question.
June 14, 2016 at 5:15 am #1198161Up::0Bert’s right. $75k is generally referenced as the GST registration turnover threshold which has nothing to do with how much income tax you pay. If you are a sole proprietor then you may be access the low income thresholds that will result in zero tax (around $20k and below). But as Bert points out there are so many variables not stated that its impossible to analyse. Tax residency for example will effect access to the low income threshold. Then of course the personal tax rates increase progressively to the top end circa 50%
Alternatively if you have a company then you pay the company tax rate on every dollar of profit – there is no threshold. That company tax rate for small business entities is currently 28.5%
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