A Step-by-Step Guide to Calculating Your Business Tax Estimate

February 20, 2024
5
minutes to read
by
Ben Winford
Table of Contents

As a small business owner in Australia, it is crucial to calculate your tax estimate for the year to ensure that you are prepared for your tax return and to budget for any tax payments that may be due. Knowing how much tax you will pay can help you make critical financial decisions for your business and ensure you comply with the tax laws.

Best Tools for Calculating your Business Tax Estimate

One of the easiest ways to calculate your tax estimate is by using the Australian Taxation Office (ATO) Tax Withheld Calculator. This tool can be found on the ATO website and can be used to calculate the amount of tax that should be withheld from your business income. It considers your income, tax file number, and any relevant allowances or deductions. 

Thriday is a next-generation accounting software designed to help small businesses in Australia manage their finances and stay compliant with tax laws. One of the ways that Thriday enables you to do your tax calculations is by using AI to reconcile and predict your tax position and assist with BAS and tax-related tasks. 

Another tool that can be used to calculate your tax estimate is the Small Business Tax Dashboard. This tool is also available on the ATO website and allows you to view your business activity statements (BAS), track your GST and fuel tax credits, and check your super guarantee obligations, among other things. 

In addition to these tools, you can also consult a tax agent or accountant to help you calculate your tax estimate. They can guide and advise you on preparing for your tax return and help you navigate the tax laws and regulations.

Risks of not Calculating your Business Tax Estimate

Once you have calculated your tax estimate, it's important to start preparing for your tax return. This includes keeping accurate records of your income and expenses and ensuring that your business-related documents are in order. It's also important to budget for any tax payments that may be due and to put money aside to cover these payments. 

Failing to estimate your potential tax liability as an Australian business can lead to several common issues: 

  • Underpayment of taxes: If you don't calculate your potential tax liability, you may not set aside enough money to cover your tax bill, resulting in underpayment. This can lead to penalties and interest charges from the ATO. 
  • Cash flow problems: Not understanding your potential tax liability clearly can cause cash flow problems for your business. This can make it challenging to meet your financial obligations and negatively impact your business's overall financial health. 
  • Difficulty in budgeting: Without estimating your potential tax liability, it can be challenging to budget for your business's expenses. This can make it hard to plan for future costs, leading to financial difficulties for your business. 
  • Compliance issues: Failing to estimate your potential tax liability can lead to non-compliance with tax laws and regulations. This can result in penalties and fines from the ATO and damage your business's reputation. 
  • Difficulty in forecasting: Not knowing your potential tax liability can make it difficult to forecast your business's future financial performance accurately. This can make it difficult to make informed business decisions, and it can impact your ability to grow your business. 
  • Difficulty in planning: Without an estimate of the potential tax liability, it's hard to plan for the future, and you can't take advantage of the opportunities that may arise. 

How does Thriday Calculate Business Taxes Automatically?

Some of the features that Thriday offers to help with tax calculations include: 

  • Automated tax calculations: Thriday can automatically calculate the amount of tax due based on the income and expenses conducted on your bank account* and Visa Debit card*. This can save small business owners time and reduce the risk of errors. 
  • Tax compliance: Thriday can help ensure that your business complies with tax laws by providing reminders for important tax deadlines and information on the latest tax rules and regulations. 
  • Tax reporting: Thriday can generate a variety of tax reports that can be used to support your tax return, such as profit and loss, balance sheet, and GST reports. 
  • Integration with other software: Thriday can integrate with other software and apps, such as receipt scanning and inventory management apps, making it easy to manage all aspects of your business from one place. 
Thriday makes tax time, relax time

Thriday also offers a mobile app that allows you to manage your finances on the go, and it is user-friendly, with a simple and intuitive interface that makes it easy to navigate. Overall, Thriday can save small business owners time and reduce the risk of errors, helping them stay compliant with tax laws and regulations. 

Calculating your tax estimate for the year is an essential step for small business owners in Australia. It helps you prepare for your tax return and budget for any tax payments that may be due. The ATO provides several tools, such as the Tax Withheld Calculator and the Small Business Tax Dashboard, to help you calculate your tax estimate. Consulting a tax agent or accountant can also provide guidance and advice on how.

DISCLAIMER: Team Thrive Pty Ltd ABN 15 637 676 496 (Thriday) is an authorised representative (No.1297601) of Regional Australia Bank ABN 21 087 650 360  AFSL 241167 (Regional Australia Bank).  Regional Australia Bank is the issuer of the transaction account and debit card available through Thriday. Any information provided by Thriday is general in nature and does not take into account your personal situation. You should consider whether Thriday is appropriate for you.

Why waste time on financial admin when Thriday can do it for you?

JOIN FOR FREE
Already have an account? Login here
Thriday Debit Card

SEE HOW THRIDAY HELPS
SMALL BUSINESSES

Live demo this Thursday at 12:30pm.
SAVE YOUR SPOT
Close