Tax concessions for small businesses in Australia.

Article by Emma Warren


All Aussies love a good discount. It’s no surprise that our hard-working sole traders and small businesses are also keen to get a concession where possible. 

The truth is that the majority of your business expenses are tax deductible. You just need to have a fool-proof bookkeeping system to ensure that you are documenting all of those expenses so they can be used to their fullest at year-end. Rumpel is a modern bookkeeping solution that prepares your documents for your tax accountant (If you don’t believe how easy it is, start a free trial today)

As a general rule for staying within your legal requirements, but getting as much tax returned as possible, follow these tips:

There are a few concessions that are relevant for small businesses. Depending on your specific circumstances, these may or may not be relevant for you. Be sure to check the ATO website for more details, as the exact rates and details are likely to change over time. 

Small business income tax offset.

This offset can reduce your tax bill by up to $1,000 if you run a business as a sole trader, partnership or trust. Though, it can only be applied if you have a turnover of less than $5 million. The small business offset is separate from the low and middle income tax offset, which you may also be eligible for. 

Obtaining the small business income tax offset is simple. You should report your net small business income in your individual tax return, and the tax office can automatically calculate the offset amount you’re eligible for. It will be automatically included in your assessment.

Lower company tax rate.

If you operate your business as a company, you may be eligible for the lower company tax rate of 27.5%. Before using this rate, check whether your business is a ‘base rate entity’. This depends on your company’s aggregated turnover and how much of its income is passive.

Deduction concessions.

There are many concessions you can use to deduct expenses in full, rather than deducting them over a number of years. For example, you can do this with the instant asset write-off and concessions for start-up expenses. If you bought an asset for your business that cost less than $30,000, you might be able to claim the whole expense as a deduction, using the instant asset write-off.