Good to Great: How to Scale With an Outsourced CFO

Transcript

Business Taxes in Australia Explained

If you’re looking to set up a business in Australia, it’s important that you learn the tax system. Not all taxes will impact your business, but you should become familiar with income, capital gains, and fringe benefits taxes. You’ll also need to know about payroll and land taxes as well as customs and stamp duties. Let’s take a closer look at each of these taxes.

 

Income Tax

Income Taxes account for 67% of federal government revenue in Australia. As an employer, you’re responsible for withholding income tax from your staff’s wages and salaries. You’ll collect your employees’ tax file numbers so you can accurately withhold the correct amount of taxes from their pay.

 

Capital Gains Tax

Capital Gains Taxes are paid by both individuals and companies. Your CFO will need to keep track of your business’s capital gains so they can be accurately reported on your tax filing each year.

 

Fringe Benefits Tax

Fringe Benefits Taxes must be paid on most non-cash benefits that employers give to their employees. These taxes are most commonly applied to benefits like company cars and other expense payments. Fringe benefits should be reported on the PAYG payment summary along with regular income.

 

 

Dividends Tax

Dividends paid by Australian companies are also taxed as income. If your company pays dividends to shareholders or employees, you’ll need to report those for tax purposes.

So far we’ve talked about taxes associated with income. Now let’s talk about indirect taxes like payroll tax, land tax, and customs and stamp duties.

 

Payroll Tax

Payroll Taxes must be paid by employers whose total Australian wages exceed the current monthly threshold. The payroll tax is a percentage of taxable wages paid within a certain jurisdiction, like New South Wales for example.

 

Land Tax

Land Taxes are levied on owners of land in all Australian States over a particular threshold. If your business owns land, you will need to pay these taxes, whether or not income is earned from the property.

 

Customs Duty

Customs Duty is especially important for businesses involved in importing and exporting. From July 2017, all physical goods will be subject to customs duty.

 

Stamp Duty

Stamp Duty is a tax levied by states and territories on the purchase of property. Your business will have to pay stamp duty based on purchase price, location, and loan purpose.