Small Business: 2025 Tax & Compliance Guide

Published: July 2025

Running a small business in 2025? Whether you’re a sparkie, a consultant, a shop boss or a backyard eBay kingpin, this guide has your back. Gotax are here to help you navigate the murky waters of tax and compliance without losing your sanity or your refund.

Do I Need an ABN?

If you’re running a business (and not just offloading last year’s garage sale leftovers), yes, you need an ABN. It’s your business ID for the ATO and opens the door to invoicing, deductions, and all the good stuff.

Do I Need to Register for GST?

If your turnover hits $75,000 or more a year, you MUST register for GST. No arguments. Under that? It’s optional, but once you cross the line, you've got 21 days to register.

• Registered? Charge 10% GST on your sales, lodge your BAS (usually quarterly), and pay the ATO (but you can claim GST credits too).

• Not registered? Don’t charge GST and you can’t claim GST credits. Simple.

What Income Do I Declare?

All of it. No sneaky stuff. The ATO has data-matching ninjas.

• Product sales (in-store or online)

• Fees for services

• Commissions, bonuses, affiliate income

• Cashies (yes, even those)

What Deductions Can I Claim?

If it helps you run your business, it might be deductible. Common claims include:

• Rent and home office expenses

• Utilities (internet, phone, power)

• Employee wages and super

• Contractor payments

• Inventory, stock and materials

• Tools, computers, gear

• Business-use portion of car expenses

• Insurance (public liability, business, etc.)

• Marketing and advertising

• Accounting, legal, and bank fees

Car expenses tip:

• Cents per km: Claim up to 5,000 km @ 85c/km.

• Logbook method: Claim business-use % of all running costs. More effort, often a bigger deduction.

Record-Keeping Essentials

• Save every receipt, invoice, and bank statement (digital or paper) for 5 years.

• Use accounting software, a spreadsheet, or a good filing system.

• Keep a logbook for car use if you want maximum car deductions.

Superannuation

• Have employees? You MUST pay their super.

• Sole trader or partner? You don’t have to pay yourself, but you CAN, and it’s tax-deductible.

BAS & GST Credits

• Lodge your BAS on time (or suffer the wrath of ATO penalties).

• Pay 1/11th of your GST-inclusive income.

• Claim GST credits on business purchases (for business-use portion only).

Tax Tips to Maximise Deductions

• Instant Asset Write-Off: Eligible items under $20,000 can be claimed instantly.

• Prepay expenses: Up to 12 months ahead (like rent, insurance, or subscriptions).

• Bad debts: Can’t recover it? Write it off before 30 June.

• Stock write-down: Scrap or reduce the value of slow-moving stock.

• Home office: Claim rent, power, internet, and phone for your work area.

• Keep a logbook: Don’t miss out on juicy car deductions.

• Don't ignore the small stuff: Subscriptions, bank fees, and web costs count too.

• Super contributions: Pay before 30 June to get this year's deduction.

• Depreciation: Claim on all depreciable assets, not just the expensive ones.

• Get a good accountant: Or let Gotax handle it without the price tag.

Tools to Make It Easier

Deduction Grabber App: Automatically track and categorise expenses. Free on Google Play and Apple App Store. Details at www.deductiongrabber.com.au.

eCashbooks: Easy bookkeeping for small business owners who hate accounting software. Try it at www.ecashbooks.com.

Industry-Specific Advice

Whether you're in plumbing, creative services, coaching or retail, these general tips apply across the board. But if you want tailored advice? Derek and the crew are ready for a chinwag.

Where to Get Help

• Visit https://www.gotax.com.au for tax returns, guides and more.

• Use the Deduction Grabber app for tracking.

• Or talk to a human (yep, a real one) at Gotax.

Common FAQs

Can I claim my internet and phone? Yes, the business-use portion only.

What if I use my car for both business and personal? Log it. Only claim the % used for business.

Do I need to pay myself super? Not required, but personal contributions are deductible.

Can I claim meals? Not for yourself. Client/staff functions might count, but it’s limited.

What if I make a loss? You might offset it against other income. Ask us.

Do I need receipts for everything? Yes. ATO rules say 5 years.

Common Mistakes to Avoid

• Mixing personal and business expenses

• Not registering for GST when required

• Claiming 100% of something that’s only 50% business

• Missing BAS or super deadlines

• Thinking the ATO won’t notice a missing invoice (they will)

Small Business FAQs

1. What’s the company tax rate for small businesses in 2025?

The base rate for small businesses is 25% if your turnover is under $50 million and you’re a base rate entity. 

2. Can I still use the instant asset write-off in 2025?

Yes, but the rules and thresholds may have changed.  Check the current limit and eligibility before claiming.

3. Do I need to register for GST in 2025?

You must register for GST if your turnover is $75,000 or more. Below that, it’s optional.

4. What records do I need to keep for tax?

Keep all invoices, receipts, bank statements, and payroll records for at least five years. 

5. Are there any new tax incentives for small business in 2025?

Most bonus deductions like the skills and energy boosts ended 30 June 2024. Check for any new measures in the latest budget. 

6. How do I pay myself as a business owner?

If you’re a sole trader, you take drawings. If you’re a company, you pay yourself a wage or dividends.

7. Do I need to pay super for myself?

Sole traders aren’t required to, but it’s smart to contribute. Companies must pay super for employees, including directors. 

8. What’s the deadline for lodging my 2025 tax return?

For most small businesses, it’s 31 October 2025, unless you use a tax agent, which may give you more time.

9. Can I claim home office expenses?

Yes, if you work from home for your business, you can claim a portion of running costs like electricity, internet, and rent. 

10. What’s the best way to keep business and personal expenses separate?

Open a dedicated business bank account and use it for all business transactions. 

11. Do I need to lodge a BAS in 2025?

If you’re registered for GST, you must lodge a BAS, usually quarterly. 

12. What’s the penalty for late tax returns or BAS?

Penalties vary, but you can be hit with fines and interest, so always lodge on time. 

13. Can I claim vehicle expenses for my business?

Yes, if the vehicle is used for business. 0.1 You can use cents per kilometre or logbook methods. 

14. Do I need to pay payroll tax?

Only if your total wages exceed the state threshold. Each state has different rules. 

15. What’s the minimum wage for employees in 2025?

Check the Fair Work website for the latest minimum wage rates, as they change each year.

16. How do I handle contractor payments?

If you pay contractors, you may need to report payments via the Taxable Payments Annual Report (TPAR) for certain industries. 

17. What’s Single Touch Payroll (STP)?

STP is a system where you report wages, tax, and super to the ATO every pay run.

18. Can I claim depreciation on business assets?

Yes, you can claim depreciation on assets used in your business over their effective life. 

19. Do I need to register a business name?

Only if you trade under a name that’s not your own personal name. 

20. What happens if I stop trading?

You need to cancel your ABN, finalise your tax and BAS obligations, and keep records for five years.

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Final Word

Small business tax doesn’t have to be a horror show. With good records, smart deductions, and a little help from Gotax, you can keep the taxman off your back and your cash where it belongs—in your pocket.

Want help? Start now at https://www.gotax.com.au/guest-user