Australia has a range of taxes that help fund public services and infrastructure. Understanding the different types of taxes is essential for individuals and businesses alike to ensure compliance and effective tax planning.

Income Tax

Income tax is levied on the income earned by individuals, businesses, and other entities. Individuals are taxed on their wages, salaries, and other income, with tax rates based on income brackets. For companies, the corporate tax rate is generally 30%, with a lower rate of 25% for small businesses with an annual turnover under $50 million.

Goods and Services Tax (GST)

The Goods and Services Tax (GST) is a value-added tax of 10% on most goods, services, and other items sold or consumed in Australia. Businesses collect GST on behalf of the government when they sell goods or services and can claim back the GST they’ve paid on business-related purchases.

Capital Gains Tax (CGT)

When individuals or businesses sell assets such as property, shares, or other investments for a profit, they may be subject to Capital Gains Tax (CGT). CGT is calculated on the profit made from the sale of the asset, and the tax is paid as part of the person’s income tax return.

Payroll Tax

Payroll tax is a state-based tax imposed on businesses with a total wage bill above a certain threshold. Rates and thresholds vary between states, and it is paid by employers, not employees.

Superannuation Tax

Superannuation, or super, is the system through which Australians save for retirement. Contributions made by employers are taxed at 15%, while earnings on superannuation investments are also taxed at the same rate. There may be additional tax implications when funds are withdrawn.

Fringe Benefits Tax (FBT)

Fringe Benefits Tax (FBT) is levied on employers who provide non-cash benefits to their employees, such as company cars, housing, or low-interest loans. The employer is responsible for paying the tax on these benefits.

These are just some of the key taxes in Australia, with each playing a vital role in the country’s tax system. Understanding the types of taxes that apply to you, or your business is crucial for compliance and effective financial planning. For expert guidance on managing your taxes, contact Sixth Sense Tax today.