Ever thought, “I’ll sort out the tax stuff later”? You’re not alone. But ignoring your business tax and super obligations doesn’t make them disappear. If anything, it just makes things harder down the track.
Whether you’re just getting started or running a side hustle that’s starting to take off, getting your tax and super set up properly can save you a lot of stress (and potentially a lot of money).
So let’s talk about what you actually need to do and why doing it right from the start matters more than you might think.
Are You Even Running a Business?
Sounds like a silly question, right? But it matters. Big time.
A lot of people start doing something on the side, making candles, freelancing, driving for a taxi, and assume it’s just a hobby. But the moment you’re making money with the intention of turning a profit, you’re probably running a business.
And once you cross that line, the ATO expects you to treat it like one.
That means keeping records, reporting income, and claiming deductions the right way. If you’re not sure which side you fall on, ask yourself: Am I doing this for fun, or am I trying to make money?
Because if it’s the latter, even part-time, then it’s time to get serious.
Side Hustle or Second Job? It Still Counts
Let’s say you’re working full-time but selling clothes online after hours. Or maybe you’re offering services on weekends, such as photography, tutoring, or dog walking. You might not think of it as a “business,” but the tax office does.
Every dollar you earn, even from side gigs, needs to be declared on your tax return. You can also claim expenses linked to that income, but only if you’ve kept proper records. No receipts? No deductions. It’s as simple as that.
Don’t assume your side hustle is too small to matter. If it’s making money, it matters.
Contractor or Employee? Don’t Get Caught Out
This is a common trap. You might be calling yourself a contractor, but are you really one?
Contractors run their own show. They control how and when they work, use their own tools, and invoice for their services. Employees, on the other hand, are directed by someone else and get paid a wage.
Why does this matter? Because if you’re a contractor, you’re responsible for your own tax and super. No one’s doing it for you. Mess this up, and you could be hit with a tax bill you weren’t expecting, and that’s the kind of surprise no one wants.
Choosing the Right Business Structure
Sole trader, partnership, company or trust, heard of them all but not sure which one’s right for you?
Here’s the deal: your business structure affects everything, from how you’re taxed to how much paperwork you need to do. It even impacts your personal liability if something goes wrong.
You don’t have to figure this out on your own. A registered tax agent can walk you through it. But don’t just pick whatever sounds easiest. Getting this right now can save you a headache later.
Registering Your Business: More Than Just an ABN
Got your business idea sorted? Great. Now you need to get registered.
Most businesses will need an ABN (Australian Business Number). Some will also need to register for GST or PAYG withholding, especially if you’re hiring people or earning over a certain amount.
Not sure what you need? Don’t guess. Use the business registration tools available online or speak to someone who knows the ropes. Missing a registration can delay your payments, mess up your records, or land you in trouble with the tax office.
BAS, GST, and the Big Stuff
Once your business is up and running, you’ll probably need to lodge a BAS (Business Activity Statement). This is how you report the GST you’ve collected, claim GST credits, and pay other taxes like PAYG instalments.
Yes, it’s admin. But it’s non-negotiable. And if you keep on top of your bookkeeping, it won’t feel like a mountain every quarter.
Can’t keep up? Hire a BAS agent or tax agent to help. Paying for good advice now can save you from costly mistakes later.
Super: It’s Not Just for Employees
If you’ve hired someone, even casually, you’re probably on the hook for super contributions. From 1 July 2025, the rate is 12% of their ordinary time earnings.
Miss a payment or get it wrong, and you could be hit with penalties.
Now, if you’re a sole trader, no one’s paying super for you. But that doesn’t mean you should ignore it. Future-you will thank you for putting something aside, even if it’s a small amount now.
Don’t Forget Your Records
Let’s be real. Keeping records isn’t the most exciting part of running a business. But it’s one of the most important.
You need to keep records of every transaction related to your business, including income, expenses, and invoices. And you have to keep them for five years. Not two. Not three. Five.
The good news? You don’t need a filing cabinet and paper receipts. You can store records digitally or use tools like the myDeductions app. Just make sure you’re consistent.
Because when tax time comes around, scrambling for receipts is the last thing you want.
Thinking of Hiring? Know What’s Involved
Hiring someone is a big step. It also comes with serious responsibilities.
Before you bring someone on, you need to:
- Set up Single Touch Payroll (STP)
- Register for PAYG withholding
- Sort out how you’ll pay their super
- Check if you need to register for payroll tax in your state
If you’re providing perks like cars or bonuses, you might also need to register for fringe benefits tax (FBT). And if that sounds confusing, well, it kind of is—which is why it pays to get advice before you start handing out contracts.
What If Things Don’t Go as Planned?
Not every business works out. That’s just reality.
But if you decide to close up shop, you can’t just walk away. You’ll need to make sure all your tax and super lodgments are up to date. You’ll also need to cancel any registrations, like your ABN and GST.
Even after the business is closed, you have to keep your records for at least five years. So don’t toss those receipts just yet.
And if you never actually started trading but registered anyway, you might still need to lodge a tax return, especially if you spent money getting started.
So, Where Do You Go From Here?
If all of this sounds like a lot, that’s because it is. But it doesn’t have to be overwhelming.
The key is to take it step by step. Get the basics right. Keep records. Ask for help when you need it. And remember, doing things properly from the start can save you from major problems later.
Because the truth is, being in business is serious business.
And if you treat it that way? You’ll set yourself up for something that actually lasts.
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