Tax details are subject to change. The following information was correct at publishing, but you should check with the Australian Taxation Office (ATO) to get the latest details.

Pay As You Go (PAYG) tax

If you are in business, you will pay income tax either quarterly or twice a year through PAYG instalments.

PAYG Withholding:

If you have employees or pay employees of another entity, you are required to withhold an amount from payments you make to them. If you conduct your business through a company, you are also required to withhold from payments to your company directors for their services. You may have to withhold an amount from payments to other workers such as contractors.

You also need to withhold an amount from payments to other businesses if they don't quote their Australian business number (ABN) to you on an invoice or other document if required.

You send all withheld amounts to the Tax Office. This is called 'withholding' and is done using the pay as you go (PAYG) withholding system.

PAYG instalment system:

Used for paying instalments during the income year towards your expected income tax liability on your business and investment income.

Your tax liability is worked out at the end of the income year when your annual income tax return is assessed. Your PAYG instalments for the year are credited against your assessment to determine whether you owe more tax or are owed a refund.

The Tax Office will tell you if you have to pay PAYG instalments and will provide you with an instalment rate.

Goods and Services Tax (GST)

A GST of 10 per cent applies to most goods and services consumed in Australia. If the annual turnover of your business is $50,000 or more ($100,000 or more for non-profit organisations) you must register for the GST. You'll need an ABN to do this. If your turnover is lower, you can still register.

Business Activity Statement (BAS)

Businesses must lodge their BAS with the ATO on a regular basis. The ATO's Business Portal gives businesses access to its online services.

The portal allows businesses to lodge business activity statements, see previously lodged activity statements, view accounts, update business registration details, request transfers and refunds of credit amounts, and send and receive secure messages online.

Fringe Benefits Tax (FBT)

You must register and pay for FBT if you're an employer and provide fringe benefits to your employees. This is the case whether or not the employer is the actual supplier of the benefit (for example, where the benefit is provided by an associate or under an arrangement with a third party).

A fringe benefit is broadly defined as any right, privilege, service or facility provided to an employee, or an associate of the employee (usually a family member). For example, a fringe benefit may be when you as an employer provide a vehicle for an employee or allow an employee to have use of a vehicle for private use; or pay for entertainment expenses incurred by the employee.

Record keeping

You're required to keep certain records for reporting to the ATO, including those related to:

• income tax and GST
• payments to employees
• PAYG withholdings relating to business payments.

Records must be kept for five years after they're prepared, obtained, or the transactions completed, whichever occurs later.

You can issue and store records in either paper or electronic form. That is, if you issue, or receive a tax invoice electronically, you don't have to keep a paper copy. All your business records should be readily accessible and available in English.

There are penalties for not maintaining the required records and for not keeping them for five years.

See Record keeping in the Finance section of the Toolbox for more information.

Payroll tax

Payroll tax applies to employers whose wages in Queensland exceed the exemption threshold. Check with the ATO for more details.

Employee superannuation

All employers are required under provisions of the Superannuation Guarantee (Administration) Act 1992 to provide a prescribed minimum level of superannuation support for each eligible employee, or pay a charge to the ATO.

The level of support for each employee is calculated on two factors:

1. the percentage set out in the prescribed regulations
2. the employee's base earnings.

The alternative ATO charge would be made up of the total of an employer's superannuation guarantee shortfalls and interest component, and an administration fee.

Superannuation guarantee scheme

Employers are required to make payment to a complying superannuation fund at least quarterly and must report in writing to employees the details of the contributions.

Employers must keep a record of when, what and how they have reported superannuation contributions to employees.