General Questions
For the tax year 2024-2025, the company tax rate is 25% for companies below the aggregated turnover threshold of $50 Million. Other companies with passive income the tax rate is 30%
The Australian tax year is 1 July through to 30 June.
For example, 1 July 2019 to 30 June 2020 is the tax year FY20.
Setting up a new business
If your turnover is $75,000 and over, you are required to register for GST. If your GST turnover is below the $75,000, registering for GST is optional.
If you choose to register for GST and your turnover is below the $75,000 threshold, you must include GST in your fees and claim GST credits for your business purchases, regardless of your turnover.
GST is Australia’s goods and services tax, currently set at 10%.
An ACN (Australian Company Number) is your unique assigned business number issued by the ASIC (Australian Securities and Investments Commission) to all new companies registered in Australia. If you are setting up a new company in Australia, you will be required to obtain one.
An ABN (Australian Business Number) is a unique number issued by the ATO (Australian Taxation Office) to all entities that are in business. If an entity is trading as a business, ie sole trader, partnership and company you must obtain an ABN. You will be required to display the ABN on all commercial documents such as contracts, tax invoices, etc.
Setting up business in Australia
Yes, if you want to register the .au domain name, you will need an Australian Business Number (ABN) to do so.
You must register the domain through a domain registrar accredited by the Australian Domain Name Authority (auDA). The auDA is the regulatory body that sets out the use of the .au domain space.
Not always, depends if your company carries on business in Australia and facilitates other activities in Australia.
Yes, we can certainly assist to register your company, obtain an ACNABN and register for all your tax requirements in other states. You only need to set up a company in one state of Australia, but can have more than one business name registered in other states.
Payroll and hiring staff
Although not compulsory, a written employment contract is intended to protect you, the employer. A written employment contract helps to eliminate disputes over the terms and conditions of employment that may arise.
Under Australian law, regardless of whether there is an employment agreement in place, a set of minimum entitlements applies automatically to every worker. These are known as the National Employment Standards.
Single Touch Payroll (STP) requires employers to report all salary and wages, PAYG withholding (tax) and superannuation information directly to the Australian Taxation Office (ATO) at the same time as paying your employees.
The Australian Taxation Office (ATO) introduced Single Touch Payroll to streamline the administration of employee payroll, tax and superannuation obligations. The STP reporting facility is available through most accounting and payroll software packages including Xero, MYOB, Netsuite, Quickbooks, SAP.
STP was introduced in 2018 for employers with 20 and more employees. It will be compulsory for all businesses to report through STP by 1st July 2019.
It is Withholding Payment Number – used for non resident entity who is employing in Australia. We have a more in-depth article on WPN.
STP started on 1 July 2018 for employers with 20 or more employees and 1 July 2019 for employers
with 19 or fewer employees and is a mandatory obligation.
The mandatory start date for Phase 2 reporting is 1 January 2022, and other stages will be
completed by 31 st December 2022.
The extension of STP Phase 2, will reduce reporting burden for employers who need to report
information about their employees to multiple government agencies. This will save time for
employers.
There is now a requirement to separate the components of gross earnings to assist employees with
their tax return deductions eg allowances, paid leave, overtime, salary sacrifice etc
Other information reported is employee’s basis of employment eg full time, part time, casual, reason
for employees termination.
Chief Financial Officer (CFO)
A good CFO should have a strong understanding of the company’s finances and be able to make accurate predictions. They should also be able to communicate effectively with all levels of staff, as they will need to report on financial information and provide clear explanations about their decisions on a regular basis.
The chief financial officer (CFO) is the executive who is responsible for overseeing the company’s financial operations. The CFO has a number of responsibilities, such as:
- Developing and implementing the company’s financial policies
- Ensuring that all transactions comply with laws and regulations
- Planning and directing the company’s financing
- Managing budgets and expenditure
- Coordinating activities with external auditors
Good business
A business plan will give you and your management team direction, to chart out growth in a structured way so you can capitalise on the opportunities for your business to become a success!
A business plan will also help:
- Your business to seek finance and/or funding by presenting to banks and investors why they should invest in your business.
- Map out the milestones and the strategies you will need to achieve your goals.
- It will give you better control over your business; by setting specific goals, timeframes for achieving them and how performance will be measured.
Director Requirements and Fees for an Australian Subsidiary
When establishing an Australian subsidiary, you must appoint at least one director for a proprietary company, with at least one director being an Australian resident. Directors are responsible for ensuring compliance with Australian laws, fulfilling fiduciary duties, and managing financial reporting. They can be held personally liable for the company’s actions, particularly in cases of insolvency.
Fees vary based on the director’s role and the subsidiary’s complexity. A resident director may charge between AUD 6,000 to AUD 20,000 annually for minimal involvement, while more active roles can cost AUD 12,000 to AUD 40,000. Non-executive directors typically charge between AUD 30,000 to AUD 80,000 annually, with higher fees in specialised industries. Additionally, companies often cover Director and Officer (D&O) insurance, ranging from AUD 3,000 to AUD 20,000 per year.
If you need help appointing directors or setting up your Australian subsidiary, Abdera offers expert support to guide you through the process.