TAX ESSENTIALS FOR BUSINESS • STEP 1 OF 4
Get Ready: Business Tax Basics
The best time to structure your business properly was on day one. The second best time is today.
— Anonymous
Learn how business structures work, understand ABN and GST basics, and master your BAS obligations.
Your Learning Journey
Your Learning Journey
This Step Takes: 20 minutes
Learn business structures, play the structure matching game, understand ABN/GST, and explore your BAS calendar.
Why This Matters
The right business structure can save you $20,000+ per year in tax and protect your personal assets. Most business owners never review their structure and leave money on the table.
Right structure saves $20,000+ yearly and protects your assets.
The 3 Main Business Structures
Every Australian business uses one of these structures. Each has different tax rates, liability protection, and complexity. The right one depends on your income and growth plans.
Sole Trader
You and the business are the same. All income is taxed at your personal rate (up to 45%). Simple to set up, but no asset protection. Best for side hustles under $100k.
Company (Pty Ltd)
Separate legal entity. Pays flat 25-30% tax rate. Your personal assets are protected from business debts. Best for businesses earning $100k+ or with liability risk.
Family Trust
Holds assets and distributes income to beneficiaries (family members) in lower tax brackets. Very flexible but can't distribute losses. Often combined with a company.
In Simple Terms
Structure Matcher
Match each benefit to the right business structure. Understanding these differences helps you choose wisely.
Drag these benefits to match with the correct structure:
Quick to set up, no registration fees
Personal assets protected from business debts
Split income with family members in lower tax brackets
Fixed tax rate of 25-30%, better for high earners
All income taxed at your personal rate
Flexible income distribution to beneficiaries
Sole Trader
Simplest, but high tax
Pty Ltd Company
Limited liability
Family Trust
Income distribution
💡 Tip: You can move items between structures by dragging them
ABN & GST: What You Need to Know
Two acronyms every business owner encounters. Here's what they mean in plain English.
Australian Business Number
Your business's unique ID number. Like a driver's license, but for your business.
Goods & Services Tax
A 10% tax added to most products and services. You collect it from customers and pay it to the ATO.
How GST Actually Works
Your BAS Calendar
BAS stands for Business Activity Statement. If your business has a GST turnover of $75,000+ per year, you need to lodge BAS quarterly. Click each quarter to see what's due.
In Simple Terms:
Every 3 months, you tell the ATO how much GST you collected from customers and how much GST you paid on business expenses. If you collected more, you pay the difference. If you paid more, you get a refund. It's due 28 days after each quarter ends.
What Goes on Your BAS:
GST Collected
GST you charged customers (included in your sales). You owe this to the ATO.
GST Paid
GST you paid on business expenses. You can claim this back from the ATO.
PAYG Withheld
Tax withheld from employee wages (if you have staff). Pay this to the ATO.
PAYG Instalment
Prepayment of your own income tax (if turnover is high). Reduces tax bill at EOFY.
💡 Pro Tip:
Use accounting software like Xero or MYOB. They calculate your BAS automatically and can lodge directly to the ATO. Saves hours every quarter and reduces errors.
Tax-101 for Business - Get Ready: Complete
- The right structure saves $20,000+ per year and protects your assets
- Companies pay 25-30% tax vs up to 45% personal rate for sole traders
- GST registration is mandatory at $75k turnover—you collect 10% from customers and report quarterly via BAS
Homework
What's your current business structure? If you're earning $100k+, are you structured optimally?
Check your ABN registration at abr.business.gov.au. If you're not registered, it takes 15 minutes and is free.
What's Next?
20 minutes