Starting a new enterprise in Australia is an exhilarating experience, but it comes with its own responsibilities. Maybe the biggest responsibility new business owners carry is understanding tax obligations. It is not merely a matter of filing a return at the year’s end but being savvy from day one and making choices that can affect your cash flow, compliance, and future success.
Whatever your business type is, whether a small café, beginning an online business from home, or venturing into a more specialised service market, your knowledge of tax requirements will prevent you from stress and money. To help you begin on the right note, below are ten practical tax tips that every new Australian entrepreneur should remember.
1. Get the right business structure
Before you proceed to trade, you need to decide whether you will trade as a company, trust, sole trader, partnership, or not. The kind of structure you have determines your tax rate, the level of personal liability, and the reporting requirement. For example, sole traders pay at an individual rate, while companies pay a 25% flat rate if they are base rate entities. Having this choice correct early will prevent costly changes later.
2. Register for GST if Required
If your business turnover is over $75,000 in a year, you must enroll in Goods and Services Tax (GST). If enrolled, you’ll need to charge GST on most sales, lodge regular Business Activity Statements (BAS), and can even claim GST credits on business purchases. If you’re not there yet, you can opt to register, but sometimes registering ahead of time is worth it so that you can take credit on major start-up costs.
3. Separate Business and Personal Finances
It will appear easier to have a single account for all, but it’s something new businesspeople regret a lot. Having your business in a separate bank account helps keep your personal and business finances separate, makes accounting simple, and avoids errors when you are doing taxes. It also makes it easy for you to view deductible expenses, something which is important if the Australian Taxation Office (ATO) audits your books.
4. Have Your Records in Order
The ATO requires businesses to keep records for five years, so every receipt, invoice, and contract needs to be stored meticulously. Cloud accounting software will make this a less painful exercise by scanning receipts on the go and automatically categorising them. Maintaining good records is not just about ticking the box—it makes it easier for you to see your cash flow and profitability more clearly, which is vital in your early years.
5. Claim All Qualified Deductions
New entrepreneurs too often neglect to take entitled deductions they are legally entitled to. From home office, business expenses, and professional insurance to equipment, advertising, and computer software subscription, there are numerous legitimate ways to reduce your taxable income. Just remember that expenses must be directly related to your business, and you should claim only the use for business.
6. Familiarise yourself with Asset Write-Offs and Depreciation
The government gives temporary full expensing or immediate asset write-off (the one that is the relevant financial year) that allows small businesses to claim the cost of assets eligible immediately. This can include the likes of cars, office equipment, or computers. For others, an immediate write-off does not apply, and depreciation rules are used, deducting over numerous years. Understanding which one is applicable to your purchases can make a lot of difference at tax time.
7. Budget in Advance for Tax
Perhaps the most frequent error made by new business owners is failing to set aside for tax. Since you’re not an employee, tax won’t be deducted from your income automatically. You’ll thus have to budget in advance, especially if you’re required to make Pay As You Go (PAYG) instalments. It’s worthwhile setting aside a part of each payment that you receive, so you won’t come up short when the bill is due.
8. Don’t Neglect Superannuation Commitments
If you have staff, you must pay superannuation contributions into their selected fund. From 1 July 2025, the Superannuation Guarantee rate is 12%. Paying super late will carry significant penalties. If you do not have staff, it is good sense to consider contributing to your superannuation as a way of reducing taxable income and planning your financial future.
9. Be Up to Date on Tax Changes
Tax rules change all the time. Things like what you can claim as a write-off, income thresholds, or rules around asset deductions often get updated in the federal budget. By staying up to date or having someone do it for you, you can avoid missing out on savings or falling behind on new obligations.
10. Get Professional Help Early
One of the most important tips is to hire a tax accountant who knows the special needs of startup business owners. A professional can assist you in implementing the proper systems, complying with the ATO, maximising your deductions, and providing advice that is personalised to your objectives. Having an adviser, you can trust alongside you right from the start can save you decades of money problems.
Building Strong Foundations
Enterprise in Australia is not all about pursuing your dream, it requires sound financial management and tax acumen. By structuring the right setup, keeping correct records, and understanding what you can claim, you will create a solid foundation for growth and success.
If you require a professional Tax Accountant Melbourne companies rely on, then you’re in the right place at MaxMargins Accountants. We help new entrepreneurs overcome the complexity of tax using simple, easy-to-understand guidance, so you can focus on building the business of your dreams.
