Other Tax Obligations

In addition to the need for a tax file number, Australian business number, GST and PAYG withholding registration, other tax obligations that may apply to your business include:

Pay as you go (PAYG) instalment

Pay As You Go (PAYG) instalment is a system for paying instalments towards your expected end of year tax liability on your business and investment income. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.

Superannuation

As an employer you are required to make super contributions on behalf of all your eligible employees by the cut-off date for each quarter. These contributions are in addition to your employees' salaries and wages.

The superannuation guarantee is a compulsory contribution of 9.25% for each eligible employee's ordinary time earnings to their nominated super fund.

Small Business Superannuation Clearing House - the Australian Government's free service to small businesses with 19 or fewer employees. The service reduces red tape and compliance costs associated with meeting your superannuation guarantee obligations.

The ATO website has detailed information on:

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Payroll tax

Payroll tax is a general state revenue tax assessed on the wages paid by an employer in Western Australia.

You are liable for payroll tax on wages paid or payable in Western Australia when the total Australia-wide wages paid by your business exceed $750,000 per year ($62,500 per month).

You must register as an employer register as an employer with the Office of State Revenue within seven days of the close of the month in which wages exceed $62,500 in a month.

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Fringe benefits tax (FBT)

Fringe benefits tax (FBT) is a tax paid on certain benefits employers provide to their employees or their employees' associates (typically family members).

Types of fringe benefits provided by employers include:

  • allowing an employee to use a work car for personal use;
  • giving an employee a low interest loan;
  • paying an employee's private health insurance costs; or
  • providing entertainment by way of food, drink or recreation to employees.

Certain work related items, minor benefits and relocation expenses are exempt from FBT. The rules for calculating FBT vary, depending on the type of benefit.

Use the ATO FBT calculator to work out how much FBT you need to pay.

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Capital gains tax (CGT)

Capital gains tax (CGT) is the tax you pay on any capital gain you make. Any capital gain made is declared in your annual income tax return. You are taxed on your net capital gain at your marginal tax rate.

CGT concessions are available to small businesses that satisfy at least one of four following basic conditions (In addition the asset must satisfy the active asset test):

  1. Small business 15-year exemption - a small business will be exempt from CGT on a gain arising from the sale of any business assets, provided they are sold after being held for 15 years and the business owner is either over 55 and retiring or permanently incapacitated, and the asset was an active asset for at least half of the 15 year period.
  2. Small business 50% active asset reduction - the capital gain on a business asset can be reduced by 50% if all the relevant conditions are met.
  3. Small business retirement exemption - a capital gain from the sale of a business asset will be exempt up to a lifetime limit of $500,000. The exempt amount must be paid into a complying superannuation fund, or a retirement savings account, if you are under 55 years of age. Conditions apply.
  4. Small business roll over - a capital gain from the sale of a business asset can be deferred until a later year. This means you don't include the gain in your income until a change in circumstances causes a CGT event to happen that crystallises the gain. When a CGT event crystallises the gain you have previously deferred, all or part of the gain that your deferred becomes assessable.

You must keep records of purchases, acquisitions, sale, and disposal of assets that may be subject to CGT. Records must be in English and be kept for at least five years after the CGT event. Records should show:

  • the nature of the act, transaction, event or circumstance;
  • how the event resulted in a capital gain or capital loss;
  • the date it occurred; and
  • the parties involved.

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Fuel schemes

Fuel schemes provide credits and grants to reduce the costs of some fuels or to provide a benefit to encourage the recycling of waste oils.

You may be able to claim fuel tax credits for fuel you acquire, manufacture or import to use in your business activities if you meet the eligibility criteria . To make claims you must be registered for GST and for fuel tax credits.

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Luxury car tax (LCT)

Luxury car tax of 33% applies to certain vehicles over the LCT threshold. Calculate which LCT rate applies to your business if you are a motor vehicle dealer or importer, or are purchasing a car that is subject to LCT.

In certain circumstances refunds of LCT are available for primary producers and tourism operators.

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Wine equalisation tax (WET)

Wine Equalisation Tax (WET) is a value-based tax which is applied to wine consumed in Australia .

WET is levied at the wholesale level which means wine manufacturers, wine wholesalers and wine importers are required to collect and remit WET to either the ATO or the Australian Customs Service.

If you are not registered and are not required to be registered for GST purposes you do not need to pay GST or WET.

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