• First, plan a meeting with your Accountant to decide on the most suitable structure for your business. The options available are sole trader, partnership, company, discretionary family trust, and unit trust. There is no set formula as to which structure gives you the best result. It depends upon your personal circumstances, the nature of the business, and long-term business goals. The critical factors to be considered are asset protection, income tax, capital gain tax discount, and small business capital gain tax discount.
  • Prepare a business plan and cash flow projection for the next three years.
  • Finalize the marketing plan including website, social media, branding, and digital marketing strategy.
  • Determine your financial requirement and options available to arrange finance. Carefully analyze the setup cost and provision for the contingencies in case things do not go as per the plan.
  • Decide and register a business name and domain name.
  • Identify the insurance needs of your business and discuss the options available.
  • Find out whether or not you need any license/permit to operate the business. This will require dealing with the local council and other Government bodies.
  • Open up the bank account and apply for the merchant facility (EFTPOS), if needed.
  • Choose the right accounting software. For small businesses with an annual turnover of less than $5 million, we recommend cloud-based solutions offered by MYOB, Xero, or QuickBooks.

You must register for GST if your annual business turnover exceeds $75,000 or $150,000 for a not-for-profit organization. For taxi drivers, limousine drivers, and UBER drivers, you will need to register for GST irrespective of your business turnover.

You may choose to voluntarily register for GST if your business or enterprise doesn’t fit into one of the above categories. However, once you choose to register you generally must stay registered for at least 12 months. Note that you cannot claim credit for GST unless you are registered for GST.

  • You need to obtain a Tax File Number Declaration from your employee. The TFN declaration form can be obtained from the newsagency or you can order it from ATO free of cost.
  • Obtain work cover insurance from the work cover authority of your state.
  • Determine your employer nominated or default super fund.
  • Register for PAYG and determine whether or not you need to pay any payroll tax/Fringe Benefits Tax.
  • Ensure that you are not paying less than the minimum rate prescribed by the relevant award/fair work ombudsman.

You need to have work cover insurance if you expect to pay your employee more than $7,500 a financial year (including super and bonus), or if you have any apprentices or trainees. If you are operating under sole trader or partnership and you do not have any employees working for you then you are not required to register for work cover insurance. However, if you are a director of a proprietary limited company and you receive wages, you are covered by the work cover insurance.

If you fail to register for work cover insurance and one of your workers suffers an injury at work, Work Safe may still pay compensation. In such circumstances, the cost of compensation provided to your worker will be recovered from you. Remember that you may also face significant penalties for not registering for work cover insurance.

Generally, if you pay an employee $450 or more (before tax) in a calendar month, you have to pay a super guarantee (SG) on top of their wages. Currently, the SG is 9.5% of their ordinary time earnings (OTE).OTE is usually the amount your employee earns for their ordinary hours of work. It includes things like commissions, shift loadings, and allowances, but not overtime payments.

If your employee is under 18 or is a private or domestic worker, such as a nanny, they must also work for more than 30 hours per week to qualify.

You have to pay super for some contractors, even if they quote an Australian business number (ABN). You pay super no matter whether the employee is full-time, part-time, or casual. The rule does not change even if your employee is a temporary resident.

If you have worked and earned super while working in Australia on a temporary visa, you can apply to have this super paid to you as a Departing Australia Superannuation Payment (DASP) after you leave. There are eligibility criteria that you will need to meet to claim your DASP. You must be able to confirm your immigration status and prove your identity.

Your super fund or Australian Taxation Office depending upon who is holding your super will pay your super after withholding appropriate DASP tax. The tax rate varies from 38% to 65% depending upon our circumstances.

Section 8-1 of the Income Tax Assessment Act 1997 allows a deduction for losses and outgoings incurred necessarily in producing assessable income. The same section provides that a taxpayer cannot deduct a loss or outgoing to the extent that:

  • It is a loss or outgoing of a capital nature
  • It is a loss or outgoing of a domestic or private nature

The child care expenses are regarded as expenses of private nature and accordingly they are not claimable as a tax deduction. You may be able to claim the Child Care Tax Rebate (CCTR) through the Family Assistance Office.

Please check the following link for further details:


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