Business & Tax Obligations: What You Need To Know

As an employer, managing your tax obligations is an important part of your business. Tax obligations for your business will be different, depending on the type of work you are in, the number of employees, and what benefits you give out.

Running a business as a sole trader, company or trust has different tax implications, so you need to make sure you know what to consider when looking at the best legal structures for your business.

A few things you need to consider when managing your tax and employer obligations are:

Australian Business Number (ABN)

Make sure to apply for an ABN for your business. An ABN is used as a reference by the Australian Taxation Office (ATO) and helps manage your tax and business obligations.

You also need an ABN when dealing with other businesses and government departments.

LINK: How to apply for an ABN

Goods and Services Tax (GST)

GST is a tax of 10% on most goods, services and other items sold or consumed in Australia.

Depending on your type of work or services you offer, you may need to register for GST.

LINK: Registering for GST

Business Activity Statement (BAS)

When reporting and paying your tax to the ATO, you must lodge an activity statement.

You can do this through the ATO Business Portal, which you can also use to manage your business tax.

LINK: ATO Business Portal

Pay As You Go (PAYG)

The Pay As You Go system allows you to pay expected tax liabilities in installments. The ATO notifies you of any PAYG obligations you may need.

As an employer, you have to help your payees meet their end-of-year tax liabilities. You can do this by collecting PAYG withholding amounts from payments you make to your employees, contractors or other businesses without an ABN.

You must register for PAYG withholding before you are first required to withhold an amount from a payment.

LINK: PAYG withholding

Fringe Benefits Tax (FBT)

If you give out particular benefits to your employees or to anyone associated with your employees, you could possibly be liable for Fringe Benefits Tax (FBT). If you think you do, you have to register for FBT with the ATO, and then lodge a tax return every year.

FBT still applies if the benefits are provided by a third party in an arrangement with the employer.

LINK: Fringe Benefits Tax

If you have any questions regarding Business and Tax Obligations, please call us on (07)3806 4484 or email us at gday@hannans360.com.au