Starting a Business?

Written By James Kol

Starting a business in Australia can be exciting and a little daunting. In this guide, we walk through the key steps: choosing a legal structure, getting your ABN and GST registrations, setting up your accounting system, understanding tax and reporting obligations, and why involving an accountant early can help. We aim for clear, practical advice for new small business owners, sole traders, startups and young entrepreneurs in Australia.

Choosing the Right Structure

When you set up, choose a business structure that fits your needs. The main options are:

  • Sole Trader – one person owns the business. It’s the simplest form and has fewer legal obligations.

  • Partnership – two or more people share ownership and decision-making. More complex than a sole trader but simpler than a company.

  • Company – a separate legal entity. A company offers limited liability protection (owners’ personal assets are protected) but is more expensive and complex to run.

  • Trust – an arrangement where a trustee holds assets for beneficiaries. Trusts are typically complex and costly to set up and operate.

Each structure has different tax rules, risks and costs. For example, a sole trader pays income tax on profits directly, while a company files its own tax return. It’s wise to discuss your choice with an adviser or accountant early, since the best option depends on your goals, expected profit and risk tolerance.

Register for ABN and GST

Every business needs an Australian Business Number (ABN) and a Tax File Number (TFN). An ABN is a free unique 11-digit ID that lets you deal with government agencies and other businesses. You can apply for an ABN online through the Australian Business Register (ABR) once you have details like your structure, proof of identity and business activity.

Once you have an ABN, consider GST. You must register for GST if you expect annual turnover of $75,000 or more (or $150,000 for non-profits). GST is a 10% tax on most sales; if registered, you add 10% to your prices and collect it from customers, then pay it to the ATO. Check your turnover regularly: if you pass $75k, you have 21 days to register. Below the threshold, registering is optional - but if you do, you can claim GST credits on purchases.

Key registrations:

  • Get your ABN first (it’s free to register). You’ll need it to register for other taxes.

  • GST: Once your ABN is active, register for GST through the ATO if required.

  • PAYG withholding: If you plan to pay salaries or certain contractors, register for PAYG withholding before the first payment.

Setting Up Accounting and Bookkeeping

With the legal side sorted, set up your financial systems. Keeping good records from day one makes everything easier. The ATO now recommends using digital record-keeping (cloud software or spreadsheets) so you can automate calculations and reporting. Most Aussie small businesses use online accounting software (e.g. Xero, MYOB, QuickBooks) which can record transactions, calculate GST and generate invoices automatically.

For example, a small business owner can focus on packing orders while an accountant handles the bookkeeping. The right software syncs with bank feeds and avoids manual errors. Make sure any software you choose is Standard Business Reporting (SBR) compliant, and ask your accountant or adviser which platform they recommend - they often have a preferred system that links directly to the ATO. Going digital early means you’ll spend less time on paperwork and more time on your business.

Also, keep thorough records of every sale and expense. Store receipts, invoices and statements (digital copies are fine). You’re required to keep most business records for at least 5 years, so set up a secure backup or cloud storage. (This includes everything needed to support your tax returns.) Being organized now saves headaches later.

Taxes and Ongoing Compliance

Know your tax and reporting duties before you earn your first dollar. All businesses need a TFN and ABN. Most also file an annual tax return. Beyond that, many businesses must lodge a Business Activity Statement (BAS) each quarter or month. A BAS is how you report and pay GST, PAYG withholding and other taxes to the ATO.

If you have employees or contractors:

  • PAYG withholding: You must withhold tax from employee wages, directors’ fees or contractors where required. Register for PAYG withholding before the first payroll. Then report and pay these amounts to the ATO on your BAS (quarterly or monthly depending on totals).

  • Superannuation: As an employer, you must pay compulsory super contributions for eligible staff. The current rate is 11.5% of ordinary wages (increasing to 12% from 1 July 2025). Pay on time each quarter. (Late super can incur penalties.)

  • Other taxes: You may also encounter payroll tax (state-based, if your total wages exceed a threshold) or fringe benefits tax (FBT) if you provide employee benefits.

Tax deductions: Don’t forget to claim your business expenses as tax deductions. Costs like equipment, supplies, phone bills, travel or a portion of home office expenses can be deducted to reduce your taxable income. Keeping clear receipts and records (see above) makes this easier.

Put aside money for tax. The ATO recommends using a separate account so you’re not caught short. Lodge and pay on time: the ATO charges penalties and interest on late BAS or tax payments. If you stay on top of your obligations each year, you avoid costly fines.

The Value of an Accountant

Even if you’re a hands-on entrepreneur, a qualified accountant can be a valuable partner right from the start. They bring expertise that can save you time and money. For example, an accountant can help you build a realistic business plan with cash flow forecasts. This means estimating when bills are due and when you expect to get paid, so you can manage your cash wisely. They’ll also advise on the best structure and tax setup for your situation (for instance, whether running as a company or a sole trader makes sense).

Accountants can set up your bookkeeping system, choose accounts and integrate your software so everything runs smoothly. They prepare regular financial reports (profit & loss, cash flow, balance sheet) so you always understand your numbers. They’ll also handle complex compliance tasks like lodging BAS, PAYG summaries or payroll tax returns correctly. This lets you focus on customers and growth instead of paperwork.


Think of an accountant as a behind-the-scenes partner for your business. They can help tighten your tax planning so you pay no more than necessary, and flag any issues (like a missed payment) early. They can even strengthen your chances of loans or investment: for example, by preparing professional projections and financial statements that satisfy banks or investors. Many business owners find that professional advice more than pays for itself through smarter planning and avoiding mistakes.

Starting a business involves many pieces, but you don’t have to do it all alone. Use the steps above as your roadmap, and consider getting advice from a qualified accountant or business adviser early on. They can tailor strategies to your specific venture and help set you up for success.

James Kol