The Beginner’s Cheat Sheet to Small Business Taxes
It you are starting up your own small business, you need to get a grasp on tax terms pronto!
Here are some terms you will have heard thrown around:
GST: Goods and Services Tax And with GST comes your
BAS: Business Activity Statement.
PAYG: Pay as you Go withholding and installments
Let’s break it down…
GST (Goods and Services Tax)
GST is a tax which is based on the transactions made within a business, sales and purchases. There are some sales and purchases that may be GST free, for example, if they are overseas; but in general GST is 10% of your business transaction. Businesses have to be registered for GST if they earn gross sales of over $75,000 in a financial year. When invoicing your customers, you need to charge 10% GST, and your invoices must look a certain way to comply with the tax rules, Cashflow Manager can help you with this automatically.
For more information on GST , please visit the ATO website.
BAS (Business Activity Statement)
When you have a business that is registered for GST, the GST you collect on your sales, less the GST you paid on your purchases must be remitted to the government via the BAS. This needs to be completed annually, quarterly or monthly depending on the business reporting obligations. Cashflow Manager can produce your BAS easily…
PAYG (Pay As You Go Withholding and Installments)
If your business employs staff, then wages tax or PAYG withholding must be deducted from the gross wages and remitted to the tax office via the BAS or IAS each quarter or month, depending on the amount of wages you pay your staff. Cashflow Manager can print your PAYG summaries for employees in minutes.
For more information on PAYG, please visit the ATO website.
Comments (2)
I am the accountant of my own business. This article is very helpful for me. I think that I’ll be able to accomplish my business tax easily with the help of this article. Thanks for sharing this article.
Wow, Thanks for the great tips! I did have a question though.
Could you please tell me – What are the accounting/bookkeeping requirements for start up
companies and how much are typical costs for accounting services?