Will Small Business Tax Go Up?

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

As a small business owner in Australia, staying on top of your financial responsibilities is essential. Among these responsibilities, managing small business taxes is a critical task that can significantly impact your bottom line. One question that often looms over business owners' minds is whether small business tax rates will increase. In this guide, we will explore the purpose of small business taxes, the current tax rates, the possibility of tax increases, strategies to reduce your tax burden, and how Thriday's automated accounting can streamline your tax deductions.

Purpose of Small Business Taxes 

Taxes are the lifeblood of any country, funding essential public services like healthcare, education, and infrastructure. Small business taxes play a vital role in this financial ecosystem. When businesses contribute their fair share of taxes, it ensures that the government can provide these services and maintain a stable economy. 

Small business taxes, specifically, are designed to contribute to the economy by taxing the income and profits generated by businesses. These funds are then reinvested into public projects, helping to create a conducive environment for businesses to thrive. 

Current Rate of Small Business Tax 

The current tax rates for small businesses in Australia are structured to accommodate various business structures and income levels. The tax rate for small companies with an aggregated annual turnover of less than $50 million is 25% for the 2023-2024 financial year. Sole traders and partnerships are taxed based on individual tax brackets, depending on their total income. The maximum tax rate is 45% for those earning $180,000.

It's crucial to stay informed about the latest tax rates and any changes made by the government, as these rates can directly impact your business's financial health. 

Small business operator

Will Small Business Tax Go Up? 

The question of whether small business tax rates will increase in the future is a significant concern for many business owners. Tax rates can be influenced by a range of factors, including changes in government policy, shifts in the economy, and budget considerations. 

To gain insights into potential tax increases, monitoring ATO announcements and government policies is essential. The government's budget decisions, particularly tax revenue-related ones, can provide clues about future tax rate changes. However, it's important to note that tax policies can change over time, and predictions can be speculative. 

While tax rate increases are always possible, it's equally important to focus on strategies to minimise your tax liability and protect your business from potential financial impacts. 

How To Reduce Business Taxes 

Reducing your business taxes is a legitimate goal to help you keep more of your hard-earned money. Here are some strategies to consider: 

  • Maximising Deductible Expenses: Keep meticulous records of all business-related expenses. Deductible expenses, including rent, employee salaries, office supplies, and utilities, can significantly lower your taxable income. 
  • Tax Concessions and Incentives: Explore available tax concessions and incentives provided by the government. These can include small business income tax concessions, capital gains tax concessions, and research and development (R&D) tax incentives. 
  • Invest in Technology: Consider using automated accounting software like Thriday to streamline tax deductions. Thriday can calculate your tax deductions accurately and help you maintain precise records, reducing the chances of errors on your tax returns.

How Thriday Automates Tax Deductions 

Thriday is an all-in-one automated accounting and bookkeeping solution designed for small businesses. It offers several advantages for tax management: 

  1. Accurate Tax Calculations: Thriday can calculate your tax deductions accurately, ensuring that you maximise your allowable deductions while avoiding costly errors. 
  2. Efficient Record-Keeping: Thriday helps you maintain comprehensive financial records, making it easier to track deductible expenses and stay organised for tax time. 
  3. User-Friendly Interface: You don't need to be a financial expert to use Thriday. Its user-friendly interface is accessible to business owners with varying levels of financial expertise. 
  4. Timely Tax Lodgment: Thriday can help you stay on top of your tax lodgment deadlines, ensuring you submit your returns to the ATO on time and avoid penalties. 

By automating your accounting and tax processes with Thriday, you can simplify your financial management and focus more on growing your business. You can join Thriday for free today

Small Business Tax FAQs 

Here are answers to some common questions about small business taxes: 

1. How often should I report and pay taxes? 

The frequency of reporting and paying taxes varies depending on your business structure and turnover. Most small businesses submit Business Activity Statements (BAS) quarterly. Individual tax returns are generally due by 31 October each year. 

2. What are the consequences of non-compliance? 

Non-compliance with tax regulations can lead to penalties and fines. Meeting tax deadlines and reporting accurate information is essential to avoid these consequences. 

3. How can I keep track of deductible expenses? 

Utilise accounting software like Thriday to keep track of deductible expenses efficiently. Thriday can categorise and store your receipts, making it easy to claim deductions when filing your tax returns.  

Key Takeaways 

While the possibility of small business tax rate increases is a concern, proactive tax planning and efficient financial management can help mitigate their impact on your business. Stay informed about tax changes, explore tax-saving strategies, and consider using tools like Thriday to automate your accounting processes. By taking these steps, you can protect your business's financial health and ensure compliance with tax regulations.  

Ready to simplify your small business accounting and tax management? Explore the benefits of Thriday, your trusted partner in automated accounting. Join Thriday for free today and take control of your financial future.

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?

Already have an account? Login here
Thriday Debit Card


Live demo this Thursday at 12:30pm.