Company Tax Calculator Australia

Company Tax Rates and Eligibility

In 2024/25, 2025/26 and 2026/27, an Australian trading company pays 25% on taxable income if it meets both base rate entity tests. The standard company rate is 30%. Sections 23 to 23AB of the Income Tax Rates Act 1986 set the rates and tests.

Aggregated turnover must be under $50 million for the selected year. Start with the company’s annual turnover, include the relevant turnover of connected entities and affiliates and exclude dealings within that group.

Base rate entity passive income must be 80% or less of the company’s assessable income for the same year. Rent, royalties and net capital gains count. So do many dividends and their franking credits, and most interest. A share of trust or partnership income counts to the extent that it comes from a qualifying passive source. The Australian Taxation Office’s base rate entity guidance explains the exceptions and turnover calculation.

A sole trader includes net business income in their personal tax return and pays marginal rates on their total taxable income. Compare the same $148,600 of taxable profit with the individual income tax calculator. Use annual income for a full-year adult Australian resident with no other income or further deductions.

Before the Medicare levy and tax offsets, the sole trader pays $36,052 in 2026/27. That is $4,020 on the band to $45,000, $27,000 on the next band to $135,000 and $5,032 on the remaining $13,600. The equivalent is $36,320 in 2024/25 and 2025/26, when the first taxable band was 16%. The 2026/27 resident schedule published by the Australian Taxation Office sets out the 15% rate.

At the full 2% rate, the Medicare levy adds $2,972 to the sole trader’s example. Apply any eligible personal tax offsets separately. The company example’s $37,150 is the company’s tax alone. Salary and dividends can also affect the owner’s personal tax, so the company rate by itself cannot tell you the combined tax cost.

Taxable Income and the Calculation

Multiply taxable income by the company rate to get estimated annual tax before offsets. Accounting profit can differ from taxable income. For example, an accounting expense can need adding back if it is non-deductible, and tax depreciation can differ from the amount in the accounts.

Subtract the pay as you go (PAYG) instalments paid for the selected income year to estimate the remaining balance. If the instalments exceed estimated tax, the calculator shows the difference as excess instalments. An assessed refund depends on the tax return and how the Australian Taxation Office applies any credits.

A tax loss gives zero annual tax in this calculator. A company may be able to use a tax loss in a later year if it meets the relevant tests. From 2026/27, eligible companies can also claim a loss carry-back tax offset under separate rules. Any refund depends on the company’s tax assessment.

Worked Company Tax Example

Take a fictional incorporated mortgage brokerage in 2026/27. It has $148,600 in taxable income, $330,000 in aggregated turnover and $300,000 in assessable income. Its $3,600 of passive income is 1.2% of assessable income, so both tests pass.

At 25%, the annual company tax is $37,150. Subtract $24,000 of PAYG instalments already paid and the indicative balance is $13,150. The remaining provision for this example is $13,150 before other tax adjustments. Any dividend to the owner is a separate transaction.

For a second case, keep taxable income, turnover and instalments the same, but make $270,000 of the $300,000 assessable income passive. That 90% share fails the passive income test. Tax at 30% is $44,580, leaving $20,580 after instalments.

Using the Estimate in Cash Planning

The annual estimate gives you a target for the company’s tax provision. Use the remaining balance and the company’s actual payment dates to plan when the cash needs to be available. Check prior-year debts separately so you can allow for them in the same cash forecast.

Compare the reserve with the company’s available bank cash after upcoming bills. If the company accounts for income on an accrual basis, unpaid commission can enter taxable profit before the cash arrives.

Keep the company’s tax reserve separate from cash the owner receives. Salary and dividends have their own tax treatment. A lender assesses income under its lending policy and can ask for business and personal tax returns or company financial statements. The tax reserve is an estimate for the brokerage’s cash plan.