Company Tax Calculator for Australia

The Base Rate Entity Test

An ordinary company pays 25% income tax when it meets both base rate entity conditions. Its aggregated turnover must be below $50 million. Its base rate entity passive income must be no more than 80% of assessable income. Otherwise, the ordinary rate is 30%.

The turnover test uses the company’s relevant annual turnover together with connected entities and affiliates, including overseas entities. Apply the aggregation exclusions for dealings within that group. Enter the resulting aggregated amount for the selected year. Choose Needs review when group membership or turnover is unresolved.

The passive-income test uses assessable income before deductions as its denominator. Taxable income after deductions answers a different question. Exactly 80% passes this test, while exactly $50 million fails the separate turnover test.

Passive income includes relevant corporate distributions, their franking credits and non-share dividends. Add interest, rent and royalties, qualifying-security gains and the assessable net capital gain. Include trust and partnership amounts to the extent they trace back to passive income. Enter each amount once.

Qualifying non-portfolio dividends and some interest fall outside those categories. Classify these amounts before entering them using sections 23AA and 23AB of the company rate rules. Turnover, assessable income and taxable income are separate figures.

Taxable Income to Company Tax

Multiply whole-dollar taxable income by the applicable company rate. Start from taxable income after allowable deductions, eligible loss deductions and tax adjustments. The calculator disregards cents in taxable income. Estimated amounts display as whole dollars after calculation.

The initial figures describe a fictional ordinary company with $186,250 taxable income, $862,400 assessable income and $1,240,000 aggregated turnover. It has no connected entities or affiliates. Distributions and franking credits total $12,500, with another $8,600 of interest, rent and royalties.

Passive income totals $21,100, or 2.45% of assessable income when displayed to two decimal places. Both tests pass. At 25%, estimated company income tax is $46,563.

If the same company instead has $50 million aggregated turnover, the rate becomes 30%. Tax on the same $186,250 displays as $55,875. The increase, calculated before display rounding, displays as $9,313. Both supported financial years use these ordinary company rates.

What the Result Does Not Settle

The result estimates company income tax before offsets and credits. PAYG instalments are advance payments against annual tax. Deduct them when reconciling the company’s final assessment, without reducing the income used in this calculation.

Company income tax and dividend franking are separate calculations. A dividend’s available franking credits depend on the franking account and imputation rules. Shareholders then apply their own tax rules to distributions. The Parliamentary Budget Office explanation of dividend imputation shows how company and shareholder tax connect.

This calculator covers ordinary companies using the 25% or 30% rates. Special-rate companies, trustee assessments and consolidated-group adjustments need their own calculation. A company-car benefit needs an FBT calculation. Enter a separately worked-out taxable income figure after any relevant company deductions.

All entries stay on this page in your browser. The calculator sends no entered figures to Tax Genie or the ATO and saves none in browser storage.

Compare a Sole Trader and a Company

For a small-business return estimate, choose Company or Sole trader. The headline shows income tax for that business type. Enter taxable business profit after deductions and adjustments. Company profit is not the owner’s wages.

This business tax calculator compares tax on the same entered profit before taking money out of a company. The comparison applies individual income tax to the same entered net profit as the company’s taxable income. It assumes an adult Australian resident for the full year, with no other income. It includes the low income tax offset where available.

At $186,250, sole trader income tax is $50,251 for either supported year. That exceeds the example company’s $46,563 by $3,688. A negative difference means the sole trader estimate is lower.

These figures exclude Medicare levy and surcharge, study loan repayments and the small business income tax offset. They also exclude other offsets, compliance costs and the tax effect of taking company profits out.

Retained company profit belongs to the company. Salary and dividends can change the overall tax paid by the company and its owner. Use the individual tax calculator for a fuller personal estimate after deciding how profits reach the owner.