Small Business Tax
Below is a range of useful tax rates for small and medium sized businesses that apply for the 2022-23 year including:
- individual marginal tax rates
- company tax rates
- reasonable domestic and overseas travel allowance amounts
- acceptable amounts for goods taken from stock for private use by business owners
- motor vehicle cents per kilometre rate
- motor vehicle depreciation cost limit
- concessional and non-concessional superannuation contributions limits
- other superannuation and GST thresholds.
Resident Individual Tax Rates - 2022-23 year (unchanged from previous year)
| TAXABLE INCOME | TAX ON THIS INCOME |
| $0 – $18,200 | Nil |
| $18,201 – $45,000 | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | $29,467 plus 37c for each $1 over $120,000 |
| Over $180,001+ | $51,667 plus 45c for each $1 over $180,000 |
| Compulsory superannuation rate: 10.5 from 1 July 2022 |
Notes on tax rates
- Taxable income includes capital gains.
- Medicare levy is imposed at the rate of 2% of taxable income is not included.
- Resident individuals are entitled to a refund of imputation credits that exceed the primary tax payable.
- Resident individuals are entitled to the 50% discount on the disposal of assets that are held for at least 12 months.
Reasonable Travel Allowance Claims for Domestic & Overseas Travel
Where an employee, company director, or office holder receives an allowance for travel costs within or outside Australia and the person makes a claim for the costs of accommodation, food, drink and incidental expenses up to certain limits, then the person is not required to keep written evidence (i.e. receipts) of the expenses. These deduction limits are based on the salary of the person and the destination of the trip.
The travel must be for business purposes and the person must be sleeping away from home. Note this concession does not apply to self employed persons, including partners in a partnership.
Click here and then scroll down to access the reasonable travel allowance claims within Australia for 2022/23
Click here and then scroll down to access the reasonable travel allowance claims within Australia for 2021/22
Goods Taken from Stock for Private Use by Business Owners
The ATO each year issues a Determination which outlines the amounts that are acceptable as estimates of the value of goods taken from trading stock for private use by business owners (including their associates) in certain industries who operate as sole traders or in partnership. The relevant amounts need to be included in the assessable income of the individual for the year.
Note that an adjustment for the GST credits claimed in relation to these amounts also needs to be made.
Fringe benefits tax and a different set of valuation rules apply where the business owner is employed through a company or family trust.
Click here and then scroll down to access the acceptable amounts for 2022/23
Click here and then scroll down to access the acceptable amounts for 2021/22
Company Tax Rates
The standard company tax rate is 30%.
From the 2017–18 income year, companies that are base rate entities must apply the lower company tax rates (see below table).
A base rate entity is a company that both:
- has an aggregated turnover less than the aggregated turnover threshold - which is $50 million from the 2018-19 year onwards
- 80% or less of assessable income is base rate entity passive income (e.g. interest, dividends, rent, and net capital gains).
| Income Year | Applicable Turnover Threshold ($) | Company Tax Rate (%) |
| 2017-18 | 25 million | 27.5 |
| 2018-19 | 50 million | 27.5 |
| 2019-20 | 50 million | 27.5 |
| 2020-21 | 50 million | 26.0 |
| 2021-22 and future years | 50 million | 25.0 |
Notes
Companies are required to maintain a franking account on a tax paid basis and are not entitled to a refund of imputation credits that exceed the tax payable.
Companies are not entitled to the 50% discount on the disposal of assets that are held for at least 12 months.
PAYG Withholding Calculator
This calculator is provided by the Australian Taxation Office and determines the PAYG Withholding for an employee who is paid either weekly, fortnightly or monthly.
Click here to access the calculator.
Motor Vehicle Depreciation Cost Limit
Since 1980, the depreciation deduction for cars has been limited by a deemed maximum cost price depending on the year in which the car was acquired.
| Income Year | Depreciation Cost Limit $ |
|---|---|
| 2015 | 57,466 |
| 2016 | 57,466 |
| 2017 | 57,581 |
| 2018 | 57,581 |
| 2019 | 57,581 |
| 2020 | 57,581 |
| 2021 | 59,136 |
| 2022 | 60,733 |
| 2023 | 64,741 |
Per Kilometre Motor Vehicle Rates
These rates are used by individuals when making a claim for motor vehicle expenses up to a maximum of 5,000 business kilometres. They are also used by employers when reimbursing employees for business use of their vehicles.
From 1 July 2015, a single rate applies as follows:
2015/16 Year: 66 cents per kilometre
2016/17 Year: 66 cents per kilometre
2017/18 Year: 66 cents per kilometre
2018/19 Year: 68 cents per kilometre
2019/20 Year: 68 cents per kilometre
2020/21 Year: 72 cents per kilometre
2021/22 Year: 72 cents per kilometre
2022/23 Year: 78 cents per kilometre
Taxation of Complying Superannuation Funds
Superannuation funds are taxed a rate of 15% on taxable income which includes employer contributions and the deductible portion of self employed contributions. Funds are entitled to a one-third discount on the disposal of assets that are held for at least 12 months and are also entitled to a refund of imputation credits that exceed the tax payable.
Income tax is not payable by the fund on income and capital gains where pensions are paid to the members.
There is currently a $1.7 million cap on the amount of superannuation benefits that an individual can have in pension phase which is not subject to tax. The excess over this amount will need to be withdrawn by the member or maintained in an accumulation phase account where earnings are taxed at the rate of 15%.
Superannuation Contributions Work Test
From 1 July 2022, individuals who are aged between 67 to 74 years old are able to make non-concessional and salary sacrificed contributions without meeting the work test, subject to the existing contribution caps (refer below).
However the work test will need to be satisfied for individuals aged between 67 and 74 to claim a deduction for personal concessional contributions. The work test requires an individual to work a minimum of 40 hours in a 30 consecutive day period at any time during the financial year.
Personal concessional or non-concessional contributions can be accepted up to 28 days after the month in which the person reaches the age of 75.
Concessional Superannuation Contribution Limits
The following contribution limits apply for the 2022/23 year:
- A single annual concessional contributions cap of $27,500 (unchanged) applies to all individuals - both concessional personal and employer contributions are included in this threshold.
- the threshold at which high income earners pay additional contributions tax (Division 293 Tax) of 15% is $250,000 (unchanged).
Carry-Forward "unused" Concessional Super Contributions
From 1 July 2019, individuals can make 'carry-forward' concessional super contributions if they have a total superannuation balance of less than $500,000 at 30 June of the previous year. The unused concessional contributions caps can be used on a rolling basis for five years upon which they will expire.
Example
Assume no unused contributions for the 2019-20 year. If a person had $20,000 in concessional contributions made on their behalf during the 2020-21 and 2021-22 years, the $5,000 unused cap for 2020-21 and $7,500 for 2021-22 (total $12,500) carries forward to the 2022-23 year.
This means the person can make concessional contributions of up to $40,000 in the 2022-23 year without breaching the concessional contributions cap of $27,500 if their super balance was less than $500,000 at 30 June 2022.
Non-Concessional Superannuation Contribution Limits
From 1 July 2021, the annual non-concessional (after-tax) contribution cap was increased to $110,000 per year, and $330,000 under the 3 year bring-forward rule.
The following table outlines the non concessional contribution and the bring forward available to members from 1 July 2021:
| Total superannuation balance | Non concessional contribution and bring forward available |
|---|---|
| Less than $1.48 million | Access to $330,000 cap (over three years) |
| $1.4 million to less than $1.59 million | Access to $220,000 cap (over two years) |
| Greater than or equal to $1.59 million to less than $1.7 million | Access to $110,000 cap (no bring-forward period, general non-concessional contributions cap applies) |
| Greater than or equal to $1.7 million | Nil |
The total superannuation balance is determined on 30 June of the previous financial year.
Other Superannuation Thresholds for 2022/23
- Super guarantee (SG) rate - From 1 July 2022, increased to 10.5% (from 10.0%) of ordinary time earnings. The rate will progressively increase to 12% by 1 July 2025.
- $450 per month eligibility threshold for when SG is paid - this threshold was removed from 1 July 2022. Accordingly, employers only need to pay super for employees under age 18 when they work more than 30 hours in a week
- Maximum super guarantee contributions base – increased to $60,220 from $58,920 per quarter. Employers don’t need to provide the minimum super guarantee support for the part of earnings above this limit.
- Capital Gains Small Business contributions cap – increased to $1,650,000 from $1,615,000. This is a lifetime cap on non-concessional contributions which have been sourced from the retirement or 15-year small business capital gains tax concessions. Note these contributions don't count towards the individual's non-concessional contribution limits above.
- Low rate tax cap – increased to $230,000 from $225,000. This cap is the maximum amount of superannuation lump sum benefits (not including the tax-free component) which can be received at a nil rate of tax (or, in the case of untaxed components, at 15% rate of tax instead of 30%). This cap only applies to superannuation lump sum benefits received on or after preservation age and before age 60.
- Government Co-Contribution lower income threshold – increased to $42,016 from $41,112. This is the threshold above which the maximum co-contribution amount of $500 begins to taper.
- Government Co-Contribution higher income threshold – increased to $57,016 from $56,112. This is the threshold above which the co-contribution will not be paid.
- Low-income super tax offset - remains at $500 and the cut-off threshold remains at $37,000. This tax offset is usually paid to a superannuation account. In limited circumstances it may be paid directly to the relevant member.
GST Thresholds
| Item | * Threshold |
|---|---|
| Requirement to issue a tax invoice | $75 |
| No requirement to withhold if supplier does not quote ABN | $75 |
| Turnover for compulsory registration for GST | $75,000 (for any 12 months) |
| Turnover for compulsory registration for GST (non-profit entity) | $150,000 (for any 12 months) |
| Annual turnover for compulsory use of non-cash accounting | $10,000,000 |
| Annual turnover for compulsory monthly electronic BAS lodgement | $20,000,000 |
* all amounts are GST exclusive
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