Taxes in Australia

Taxes are administered and collected by the Australian Taxation Office (ATO), and in some cases state government revenue offices. Businesses can save money by paying the correct amount on time and taking advantage of any tax concessions that they are entitled to. By using a Brisbane tax calculator, you may be able to reduce the amount of tax you pay if you are entitled to any tax deductions or tax offsets (rebates) or if you decide to salary sacrifice. The key taxes affecting businesses are Company (income) Tax, Capital Gains Tax (CGT) and the Goods and Services Tax (GST). These taxes are all set by the Australian Government. Businesses can elect to make tax payments monthly, quarterly or annually.

Company tax

An Australian resident company is subject to company tax, at a rate set by the Australian Government. A non-resident company is taxed on its Australian source income at the same rate as a resident company. Taxable income and the tax rate may vary under limited circumstances, such as industry or business structure.

Capital Gains Tax

Capital Gains Tax (CGT) applies on any capital gain made through the disposal of assets. It is paid as part of income tax. Foreign entities may be subject to CGT on assets acquired and used in carrying on a business in Australia. Businesses are required to keep records upon acquiring assets that may be subject to CGT in the future. Small businesses may also be eligible for CGT concessions under certain circumstances.

Goods and Services Tax

The Goods and Services Tax (GST) is a national, broad-based consumer Brisbane tax calculator on most goods and services sold or consumed in Australia. Most businesses are required to register for GST with the Australian Taxation Office. Businesses which have paid for business supplies inclusive of GST are entitled to claim an equivalent input tax credit. Certain businesses may also be eligible for GST concessions.

Payroll Tax

Payroll tax is a state tax on the wages you pay to employees. It is calculated on the amount of wages paid per month and must be paid if total Australian wages exceed the exemption threshold in the relevant state or territory. The payroll tax exemption threshold and the payroll tax rate varies between states and territories.

Tax deductions

Tax deductions are certain expenses you incurred in order to earn your income. Deductions reduce your taxable income before the tax is calculated.

Common deductions include:

·         Work-related expenses

·         Self-education expenses

·         Charitable donations

·         The cost of managing your tax affairs (like paying an accountant)

You can find out more about deductions on the ATO's income and deductions webpage.

Tax offsets

Tax offsets directly reduce the amount of tax paid, and are applied after the tax has been calculated.

Common tax offsets include offsets for:

·         Low income earners

·         Taxpayers with a dependent relative

·         Pensioners and senior Australians

·         The taxable portion of a superannuation income stream

You can find out more about tax offsets on the ATO's offsets and rebates webpage.

Salary sacrificing

Salary sacrificing is another way you can reduce your tax bill. Salary sacrificing, also known as salary packaging, is when you put some of your pre-tax income towards a particular benefit before you are taxed. This is usually only tax-effective for medium and high income earners.

If you earn money from your work or from investments, you will usually pay tax on that money. Understanding how to use a Brisbane tax calculator will help you work out how much tax you should pay.