Tax reporting requirements

BUSINESS INFORMATION

An overview of the various tax reporting obligations mandated by the ATO, including business activity statements, tax returns, payroll reporting, and record-keeping.

Payroll reporting

If your business employs staff, you are required to report payments such as salaries, wages, Pay As You Go (PAYG) withholding, and superannuation to the Australian Taxation Office (ATO) through Single Touch Payroll (STP).

STP reporting occurs in real-time via your chosen online payroll system, simplifying your reporting obligations at the end of the financial year.

For further details visit the ATO website to find out more about STP reporting requirements.

Monthly or quarterly business activity and instalment activity statements

Businesses must submit a Business Activity Statement (BAS) to the ATO monthly, quarterly, or annually (if eligible for an annual GST return).

The BAS is used to report and pay Goods and Services Tax (GST), PAYG installments, PAYG withholding tax, and other tax liabilities.

Upon registering for an Australian Business Number (ABN) and GST, the ATO will automatically issue a BAS when it is due. Businesses registered for GST must lodge their BAS by the specified deadline.

An Instalment Activity Statement (IAS) is similar to a BAS but excludes GST and certain other taxes. Businesses not registered for GST will submit an IAS to manage PAYG installments.

Financial year reporting

In Australia, the financial year for tax purposes runs from 1 July to 30 June.
Businesses must lodge an income tax return for this period. Sole traders can include their business income in their personal tax return.

Record keeping

Business owners are legally obligated to maintain records for at least five years after they are prepared, obtained, or the related transactions are completed, whichever occurs last. Keeping good records helps monitor financial performance and ensures compliance with tax obligations.

Records must be in English and stored in a format accessible to the ATO. Failure to maintain accurate records may result in penalties.

These obligations persist even after selling or closing your business.

The ATO provides a record keeping evaluation tool to help identify the specific records your business needs to maintain.

Business records you need to keep

Income tax records, including:

Income and sales: Sales invoices, receipts, cash register tapes, and cash sales records.
Purchases and expenses: Tax invoices, cheque book records, and receipts.
Year-end records: Lists of debtors and creditors, stocktake sheets, and depreciation schedules.
Bank records: Bank statements and loan records.
GST records: Tax invoices from suppliers.

It is recommended to download the ATO’s booklet on How to set out tax invoices and invoices.

Employee records, including:

Tax File Number (TFN) and withholding declarations.
Records of wages, allowances, and other payments.
Superannuation records.
Fringe Benefits Tax (FBT) details.

The ATO has a record keeping evaluation tool detailing the exact records you need to keep.

Tax assistance for business owners

The ATO offers free services, including workshops and webinars, to help businesses understand and meet their tax obligations.

You can register for these services online or by calling the ATO on 13 28 66 during office hours.

Alternatively, you can engage a registered tax or BAS agent for assistance. These professionals are qualified and authorized to charge fees for their services.

Action to take

Read our guide: Choosing an accountant