GOODS & SERVICES TAX (GST)

Goods & Services Tax (GST) is charged on the supply of most goods & services in Australia (currently 10%).

Businesses register through their ABN (Australian Business Number) for GST when their turnover is $75,000 or more.

You can account for GST via two methods: Cash basis or non-cash basis. There are set criteria for each method before a business determines how to account for GST.

The method you use will determine when you must account for GST and when you are able to claim GST credits.

Businesses claim their GST credits at the end of a tax period. A tax period is either a period of three months ending on 31 March, 30 June, 30 September or 31 December, or a calendar month. 

BUSINESS ACTIVITY STATEMENTS

Businesses use activity statements to report and pay a number of tax obligations, including GST, Pay As You Go (PAYG) instalments, PAYG withholding and Fringe Benefits Tax (FBT).

You can lodge and pay your obligations electronically, by mail or in person. You must lodge on time to avoid interest and penalties. Lodgement of these forms can be done through our office directly to the ATO.

The ATO issues the activity statements before the end of the reporting period, which is usually every three months or every month, as required.

PAY AS YOU GO (PAYG) INCOME TAX INSTALMENT

Pay As You Go (PAYG) instalments is a system for paying amounts toward your expected end of year income tax liability. The Australian Tax Office (ATO) calculates and assesses the actual income tax liability when the annual company tax return is lodged.

There are 2 options available to calculate and pay PAYG instalments:

INSTALMENT AMOUNT

The ATO calculates a quarterly payment amount by using the business and investment income from the most recent tax return lodged. This is a set amount payable each quarter.

INSTALMENT RATE

The ATO provides you with an instalment rate that you can use to calculate your own PAYG instalment, quarterly. This is done by using the actual income the business has earned multiplied by the rate the ATO has provided.

The ATO will send out a PAYG Instalment notice to the business owner with the pre-printed amount or rate. Each quarter it is then to be paid by the due date written on the notice.

If at any stage you feel that you are paying too much or not enough, the instalment amounts can be varied but must be done so before the due date.

Fringe Benefits Tax (FBT)

Fringe Benefits Tax (FBT) is paid by employers on certain benefits they provide to their employees in relation to their employment (cars, car parks, housing for an employee, etc.). FBT is calculated on the taxable component of the fringe benefits provided.

Employers can generally claim an income tax deduction for the cost of providing fringe benefits and for the FBT they pay.

If you are required to pay FBT you will need to register with the ATO. Employers must self-assess their own FBT liability each FBT year (from 1 April to 31 March) and complete an FBT Return.