10 Tax Deductions for Small Business Owners in Australia

10 Tax Deductions for Small Business Owners in Australia


There are many of the small business who claim that they are qualified for Tax Deduction. But the norms that have been laid down for this can change over time. 2017 tax law amendments, some of the rules apply to the business tax deductions. It, therefore, becomes imperative that business owners know and have the factual knowledge, and can answer the question on What Can I claim on Tax?

You would be able to claim tax deductions for most of your costing that might take place while you are running your business. This will happen as long as they are in sync with your company’s income.

You can find some tax service provider, and they would help you out in giving you a step by step briefing as to how you would be able to file small business taxes.

It is important to find an accountant so that he/she would be able to guide you appropriately on filling the tax returns precisely and competently.

What Can You Claim on Tax?

Let us take a look at some of the points which would help you in claiming tax for your small business:

1. Business Account and Loan Expenses: It is incorrect to assume that your business would be working the same way as you imagine, it does not. This is not the old days when you would consider stuff on your own. Times have changed, and things need to be adjusted accordingly. Business needs to manage its account structure and their loan expenses concerning the amended tax laws.

As per this, the interest rate for businesses would be limited at 30% for larger businesses. Smaller businesses who have an average turnover of $25 million or less in the last three years would be exempted from this restriction. This is a piece of excellent news, and this also means they can take an interest in costing deductions with zero limits.

2. Deductions for Personal Super Contributions: If you are under 75, then it’s possible that you can super personal contributions that can be made on an eligible super fund. Those that are aged between 65 and 74 will need to take a work test for eligible contribution. This would involve that would need to work for a month at least over 40 hours in the financial year.

You would need to remember the total superannuation guarantee payment, salary amount and personal tax-deductible contributions for the entire fiscal year. The amount should not be more than $25,000 or else tax would apply. You would need to submit a deduction notice into the super fund to make a personal tax-deductible contribution.

3. Running Your Business from Home: It is a great idea to run your business from home. This would ensure the fact that any of the areas that might be required for personal use when you are in the office space, would be modified in its place. Your home will be your boardroom office, and you can cut back on your expenses and save up taxes immensely.

There is another thing that you can think of doing, which is also to claim your interest on home loans. Since you are running your business from there, some of the components like the water rates, insurance of the building, maintenance costs would be cut back. By applying some of these strategies, you can, therefore, save up a lot of taxes.

4. Pay Your GST ASAP: This is very much vital, and if you have not done so, then it is time that you calculate your costs up and pay off the Goods and Services Tax at the earliest. If you are unable to pay off the Goods and Services Tax before the date is due then you can take assistance from the Australian Taxation Office.

They would help you in arranging the payment for you at the earliest date possible. You can contact their customer care helpline number. But be forewarned, they will charge you adequate interest rates for the amount that you have demanded from them. It is a good practice that you pay them off as soon as possible.

5. Take Advantage of the $20,000 Instant Asset Tax Break: This is the Australian Taxation Office’s breakthrough that will benefit multiple small businesses a lot. The Australian Government introduced this amendment in the year 2015’s Federal Budget. The law states that an instant subtraction on assets that generate income up to $20,000.

There are those who take the step of an instant write-off for a select number of years. With this measure, you would be able to claim these deductions for many vital assets for the company. This might include setting up the equipment, computer workstations, vehicles, etc that are lower than $20,000. The estimated deadline that the ATO has set for this is primarily 30th June 2018.

6. Salary and Wages: Business houses can claim deductions for the salary and wages that are paid off to the workers. This is mostly done for the super contributions that the owners do to them. If you are running a business as a Company, then you would be able to claim the deduction amount for any salary that they credit to the workers.

If your business is run by you alone, and you are the sole master of the company, that makes you the business owner. In that scenario, you would not be able to pay the wage to yourself, of course. Before making any withdrawals, you should comply with the mindset of PAYG i.e., Pay As You Go withholding for every payment.

7. Telephones: This point refers to the fact about the use of mobile phones, or satellite office phone expenses for official purpose. This would come under the ambit of the Australian Taxation Office, and you would be able to claim a sufficient amount of tax deductions from it. There are two essential points in it over which you would be able to claim the deduction, these are:

  • If you have paid off the operators for the telephone costs.
  • If you have a sufficient amount of records to support your claims.

The Taxation department only evaluates these points concerning work-related purposes. So, if you are using these telephones as personal and private ones, then you need to give them the percentage of use for work.

8. Business Travel: Business Travels also come under the purview of being tax deductible under the laws laid down by the ATO. Some of the deductions on travel that are applicable for you as an owner or for your employees include the following:

  • Air Travel, train tickets, bus, and taxi travel fares.
  • Any kinds of housing arrangement costs, food expenses if you are traveling throughout the day for a business trip.

In the above case, something called the fringe benefits tax would be applicable for bearing the travel expenses of the employees.

Some points that need to be kept in mind and communicated to the tax officials while submitting travel records include,

  • What is the nature of travel?
  • For how many days was the business trip scheduled?
  • How long did the overall trip last?
  • The name of the business house with which you carried out your business.

9. Car Expenses Deduction: As a small business owner, if you have a car that is strictly used for business purposes; you would be able to claim it for tax deductions as well. There would be factors involved, of course as to how much claim amount will be deducted. They are given as follows:

  • The Business Structure of the organization plays a significant role in this case. Whether you are the sole proprietor, or you are a company, or in a partnership will determine the amount of claim that would be deducted.
  • The type of vehicle is another factor and whether it follows the industry-specific guidelines or not.
  • How frequently the vehicle has been utilized for home and business purposes, would need to be mapped as well.

10. Repairs and Maintenance: Small business houses will also be able to claim tax deductions on the count of repairs and maintenance for the company assets. Some of them include,

  • Painting the office premises.
  • Conditioning gutters
  • Maintenance of pipes for plumbing
  • Maintenance of electrical equipment
  • Any kinds of machine servicing if any.

What You Cannot Claim on Tax?

Some of the important things which do come under the ambit of small business for tax purposes are,

  • Domestic and private expenditures.
  • Entertainment based costings.
  • Penalties
  • GST credit deductions if you are taking it separately on the Company’s activity statement.

Take Advice for your Tax Pay (Universal Taxation):

You can take official to advise for paying up your tax, and get to know what can and cannot be exempted from the same. There are regulations that you might not know, and there is a need that you understand some nuances on it; which is why it is essential that you get advised pronto.


Small Businesses get a lot of leeways when it comes to certain points while filing their tax returns. But the biggest disadvantage for them could be the lack of knowledge about what is exempted and what is not. This is the reason that it is pressing to understand all the points that are mentioned above and some more after you have consulted with your accountant.

Having the right information is better than having no information at all.

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