Tax reporting requirements

Payroll reporting

As of 1 July 2019, small businesses with fewer than 20 employees are required to lodge reports with the Australian Tax Office (ATO) using Single Touch Payroll software. There is however a transition period for small businesses to prepare for this new way of reporting which ends on 30 September 2019.

Monthly or quarterly business activity and instalment activity statements

The Australian Tax Office (ATO) requires businesses to submit a business activity statement (BAS) monthly, quarterly or annually (annual GST return, if eligible).

It is used to report and pay goods and services tax (GST), pay as you go (PAYG) instalments, PAYG withholding tax and other tax obligations.

When you register for an Australian business number (ABN) and GST, the ATO will automatically send you a BAS when it is time to lodge. All businesses registered for GST must lodge a BAS before the due date.

An instalment activity statement (IAS) is similar to the BAS but without GST and some other taxes. Businesses that are not registered for GST would submit an IAS to pay PAYG instalments.

Financial year reporting

In Australia, the financial year for tax purposes runs from 1 July to 30 June.

Businesses are required to lodge an income tax return for this period. If you operate your business as a sole trader you can declare your business income as part of your personal income tax return.

Record keeping

As a business owner you are legally required to keep records for a period of at least five years after they are prepared, obtained or the transactions completed (whichever occurs last). Keeping good records of your transactions and tax invoices will help you to monitor the financial performance of your business as well as comply with your tax obligations.

Records must be in English and in a format accessible to the Australian Tax Office (ATO). You can incur penalties if you do not keep the right tax records.

Your obligations to keep records continue even after you sell or close your business.

TIP: The ATO has developed a record keeping evaluation tool to assist you to find out what records you need to keep for your business.

Business records you need to keep

Income tax records including:

  • income and sales – sales invoices, receipts, cash register tapes and cash sales
  • purchase and expense – tax invoices, cheque book records, and receipts
  • year-end records – list of debtors and creditors, stocktake sheets and depreciation schedules
  • bank records – bank statements and loan records
  • goods and services (GST) – tax invoices from suppliers.

TIP: We recommend downloading the booklet on How to set out tax invoices and invoices from the Australian Tax Office (ATO).

Staff or employee records including:

  • tax file number (TFN) and withholding declarations
  • records of wages, allowances and other payments
  • superannuation records
  • fringe benefit tax (FBT) details.

The ATO has information and a record keeping tool detailing the exact records you need to keep.

Assistance for business owners

The ATO offers a range of free services including workshops and webinars to help you understand and comply with your tax obligations.

You can register for these services online or by phoning the ATO on 13 28 66 (during office hours).

You can also get a registered tax or BAS agent to help you. Registered agents are qualified and experienced with tax and can legally charge you a fee.

More information