Getting your business ready for tax and super

We know there’s a lot to think about when starting a new business. Planning ahead and knowing your obligations will set you up for success and help you get it right from the start.

Working out if you are in business

First things first – you need to know if what you’re doing is a business or a hobby this opens in a new window .

Generally, a business is an activity that you do with the intention to make a profit. A hobby is something you do for fun. If you sell your work to cover costs and you’re not in business, you may still need to declare payments you receive as assessable income this opens in a new window  in your tax return.

Employee vs independent contractor

Knowing whether you're an employee or an independent contractor is important. Usually, employees work under their employer's direction, while independent contractors have more control over their work.

If you call yourself an independent contractor, sub-contractor or ‘subbie’, you’re likely running your own business. This means you’ll need to set up your tax and business obligations this opens in a new window . And manage your own super!

Follow these steps to work out if you’re an employee or independent contractor this opens in a new window .

Got a side hustle?

Whether it's secondary income or a small business, you’ll need to declare any income this opens in a new window  you earn from your side hustle and claim any deductions this opens in a new window . If you’re a sole trader, include this income on your individual tax return.

If your side hustle is going places, check out our tips for managing your side hustle.

Before you start a business

How should I structure my business?

Choosing the right business structure is important as it affects your tax, super and legal responsibilities. Your tax agent will be able to help decide which structure is the best fit for you.

For info on business structures and tax obligations this opens in a new window  for sole traders, partnerships, companies, or trusts visit our website.

What business registrations do I need?

Ready to start a business? There are some registrations you’ll need to get up and running, like getting an ABN or a business name.

Not everyone needs an ABN or is entitled to one. Our article can help you decide when you need ABN and how to apply for one.

Other registrations can be applied for as needed like:

• pay as you go withholding (PAYGW) if you hire workers, or

• goods and services tax (GST).

If you’re a taxi or rideshare driver – then you’ll need to register for GST straight away. Check out our article for more info on when you need to register for GST.

There may be other business registrations or licences outside of tax that you need. The Department of Industry’s registrations checker this opens in a new window  can help you find out what else you might need for your business structure.

Your tax and super obligations as a business owner

A business activity statement (BAS) is what businesses in Australia use to report and pay taxes. It generally includes info about the GST you collect and pay, as well as other taxes like PAYGW, PAYG instalments or fringe benefits tax (FBT).

Generally, once you’ve registered for an ABN and GST, a BAS will be sent to you to complete each quarter this opens in a new window . There are a few options to lodge your BAS online this opens in a new window . You can also have a tax or BAS agent handle it for you.

Your BAS is where you claim any GST credits you’re entitled to - providing they meet certain criteria. Our GST article has more info on paying and claiming GST.

Our website has more on how to complete, lodge and pay your BAS this opens in a new window .

What do I need to do when hiring workers

Thinking about hiring someone? Before you dive in there’s a few tax and super obligations you need to sort out as an employer.

Before you hire a worker, you need to:

• set up single touch payroll (STP) this opens in a new window  to report their payroll info to us each pay day

• register for PAYG withholding this opens in a new window 

• follow these 5 steps for setting up your business to pay super contributions this opens in a new window 

• register for FBT this opens in a new window  if you're thinking of providing additional perks to your employees

• check with your state or territory if you need to register for payroll tax.

Do I have to pay super as a business owner

If your business pays a worker, you’ll also need to contribute to their super. Generally, it’s 12% of their ordinary time earnings (OTE) this opens in a new window  – that’s the minimum rate from 1 July 2025. Our article has all the info you need for understanding your super guarantee (SG) obligations.

Not sure if you need to pay super? Use the super guarantee (SG) decision tool this opens in a new window  to check if you need to pay super for your employees.

Self-employed as a sole trader or partnership? this opens in a new window  You don’t have to pay super for yourself, but it’s a good idea to plan for your retirement.

What records do I need to keep? Good record keeping is essential for keeping your business on track - and you’re legally required to do it!

As a business owner you must keep records of all transactions that relate to tax super and registrations while you start, run and close a business.

There are ways to store your records electronically – like using the myDeductions tool this opens in a new window  in the ATO app. We’ve got free resources that can help you with setting up and managing your business records this opens in a new window . Don’t forget, you must keep them for 5 years.

What to do when you close a business

Closing up shop? You’ll need to make sure all your lodgments and payments are up to date before you cancel any registrations like GST or your ABN.

Whether you’ve decided to sell or close your business, hold onto your business records for at least 5 years.

If you’ve decided not to start a business you registered, you can:

• cancel your ABN, and

• lodge a tax return if you’ve made a loss.

Remember - being in business is serious business! If you need more help, our website has guidance, tools and tips to help you get ready for business this opens in a new window  with us.

We’re committed to helping small businesses, so if you're struggling to keep up with your obligations, we have support available this opens in a new window . You can also reach out to a registered tax professional for help.