Different Types Of Business Taxes In Australia

Accounting and Tax
April 17, 2023

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Taxes are necessary for running a business, but do you know what taxes you must pay?

Small to medium businesses must comply with a range of tax obligations. Understanding the different types of taxes and how they apply to your business is essential to avoid penalties and maximise your tax benefits.

Download our Business Taxes Checklist to ensure you are prepared for this season.

Different Types of Business Tax:

Income Tax

Income tax is a tax on the taxable income of businesses and individuals. Business owners must lodge annual returns and pay tax on their assessable income. This is calculated by subtracting allowable deductions from their total revenue.

For example, if an SME earns $100,000 and incurs $40,000 in deductible expenses, its taxable income would be $60,000.

The tax rate and thresholds for businesses vary depending on their business structure and level of taxable income.

Payroll Tax

Payroll tax is a state-based tax that is levied on the wages paid by businesses to their employees.

The tax rate and threshold vary by state, and businesses with a payroll above the threshold must register and pay payroll tax to the relevant state revenue office.

For example, in Queensland, the threshold is $1.3 million per year. Therefore, SMEs only pay the tax rate of any payroll over this amount.

Capital Gains Tax (CGT)

CGT is a tax on the profit from selling a capital asset such as property, shares, and other investments.

SMEs may be eligible for a range of CGT concessions, including the small business CGT concessions, which provide an opportunity to reduce or eliminate the CGT liability on the sale of certain assets.

Fringe Benefits Tax (FBT)

FBT is a tax on the value of fringe benefits provided to employees, such as company cars, private health insurance, and entertainment expenses.

Businesses that provide fringe benefits to their employees must register for FBT and pay the ATO.

There is a range of exemptions and concessions available that can help reduce the FBT liability for SMEs.

Pay as You Go (PAYG) Withholding

PAYG withholding is a system for businesses to withhold tax from employee wages and remit it to the ATO on their behalf. Companies are required to register for PAYG withholding if they have employees.

The amount of tax withheld is based on the employee’s taxable income and the relevant tax rates.

Pay as You Go (PAYG) Instalments

PAYG instalments are a system for businesses to pay their income tax in instalments throughout the year rather than in one lump sum at the end of the financial year.

Businesses that earn above a certain threshold are required to pay PAYG instalments. The instalment amount is based on the business’s previous year’s tax liability, and companies make quarterly payments.

Goods and Services Tax (GST)

GST is a value-added tax levied on most goods and services sold in Australia. Businesses with a turnover of $75,000 or more must register for GST and charge GST on their taxable supplies.

Some exemptions and concessions are available, such as small business concessions, which can help reduce the GST liability for businesses.

Fuel Tax Credits

Fuel tax credits refund the tax paid on fuel used in business operations. Businesses registered for GST using fuel in their operations can claim fuel tax credits.

Land Tax

Land tax is a tax on the value of land owned by businesses and individuals. Land tax is state-based, and the rate and threshold vary by state.

For example, in New South Wales, the land tax threshold for individuals is $734,000, and the rate starts at 1.6% for land values above the threshold.

Industry Specific Taxes

Wine Equalisation Tax (WET)

WET is a tax on the wholesale value of wine. Businesses that produce, import or wholesale wine are required to register for WET and pay the tax to the ATO.

Some exemptions and concessions are available for small wine producers and certain types of wine.

Luxury Car Tax (LCT)

LCT is a tax on luxury cars sold or imported into Australia. The LCT applies to vehicles above a specific value and not meeting specific fuel efficiency standards. Businesses that purchase or import luxury cars valued at more than $71,849 may be subject to luxury car tax.

PDF downloadable: AFP Business Tax Checklist

Know your business’s tax obligations.

Understanding these taxes and complying with the relevant regulations is essential to running a successful business.

By understanding your tax obligations, you can ensure that you comply with tax laws, maximise your tax benefits, and avoid penalties.

It also allows you to budget accordingly, as unexpected bills won’t hit you.

Our tax professionals deeply understand the requirements and how to avoid liability. They can ensure you meet your tax obligations and maximise your benefits.

If you’re not actively managing your loan, chances are you’re paying more than you need to — and missing out on savings of $50 a week or more.

Whether it’s a mortgage, personal loan, or asset finance, small tweaks can unlock big savings. At AFP Finance & Loans, we’ve helped clients reduce repayments by over $2,600 a year — without changing their lifestyle or taking on more risk.

This article breaks down practical, proven ways to help you save around $50 each week on your repayments — and why working with a broker enables you to reach your goal of paying off your loan more easily.

1. Lower Your Rate

One of the simplest ways to save $50 a week is by securing a better interest rate. According to findings by PEXA, homeowners who refinanced to a new lender saved an average of $1,908 per year (nearly $37 per week) compared to just $384 annually for those who stayed with their original lender.

The kicker? Existing customers often pay 0.21% more than new customers. That small difference could mean an extra $70 each month on a $526k mortgage.

Refinancing through a trusted broker at AFP Finance & Loans ensures you’re not just accepting the status quo. We compare lenders, negotiate better terms, and help you avoid hidden costs.

Tip: If your rate drops, keep repayments the same to pay off your loan faster and save more in interest.

2. Switch to Weekly or Fortnightly Payments

Most people don’t realise they can make an extra month’s repayment each year just by switching from monthly to fortnightly payments.

If your lender calculates interest daily, this simple change can cut years off your loan and save thousands in interest.

While more frequent payments may not free up the whole $50 immediately, the compound savings are significant over time.

3. Use an Offset Account

Do you have savings sitting in a separate account? You could be missing an opportunity to save $50 each week in interest.

An offset account is a type of bank account linked to your loan. The balance in this account is used to offset the principal (the amount you still owe) — meaning the interest you pay is calculated on a reduced balance.

An offset account allows your money to shrink your loan amount, without locking your savings away. Funds remain fully accessible — but while they sit in the account, they’re actively working to lower the interest you pay (without any extra repayments).

For example, keeping $50,000 in offset on a 6% loan saves about $3,000 a year — or $57 a week — making every dollar work harder for you.

4. Cut Hidden and Ongoing Fees

Fees can quietly erode your savings. Annual package fees can range from $300 to $400, and monthly service fees still exist on many products.

By switching to a low-fee alternative or refinancing smartly, you could reduce your outgoings by $10–$15 a week. We review fee structures and recommend lenders who offer genuine value — not just teaser rates.

Why Work with a Broker?

From refinancing and rate shopping to offset structuring and fee analysis, you will be supported from start to settlement with AFP Finance and Loans. We’ll act on your behalf, comparing options and securing better terms.

With access to over 50 lenders on our accredited panel, AFP Finance & Loans assists clients with residential loans, commercial loans, personal loans, investment finance, and more. We do the heavy lifting so you can focus on what matters to you.

How to Start Saving $50 a Week, Today

You came here to save $50 a week on your loan, and by now you should see it’s easier than it sounds.

Many people overpay without realising. However, with better advice and a few simple adjustments, you can lower costs, improve cash flow, and stay on track financially.

The next step? Get expert eyes on your current agreement. AFP Finance & Loans can help you reduce repayments, avoid fees, and structure your loan repayments to serve your goals.

Book your loan review today to put $50 a week back where it belongs: in your pocket.