My question is around pty Ltd taxation. Small businesses pay tax at 25 percent or so right.

So is this tax paid on the gross income or am I correct in assuming is paid on the gross profit?

Example

Company bills labour out at 100 an hour for 40 hours

This equates to 4000 dollars gross profit.

Is tax paid at this point paying 1000 dollars in tax.

Or do you then subtract say 50 dollars an hour of wages for 40 hours resulting I’m a net profit of 2000 then pay tax on 2000 dollars left in the companies account of 500 dollars tax?

Then the employee pays their share of tax on the 2000 dollars the company paid to them?

Secondly, if the company pays super on the hours worked, do they pay tax after super is deducted or before super is deducted from profits?

Sorry if this is confusing I’m very confused to begin with.

I Want to talk to an accountant but this time of year isn’t the best for that, so I’m just trying to get some understanding before I go in and talk to one in the new year.

  • imoldgreeeg
    3·
    2 days ago

    The PTY LTD pays the company tax rate at the end of the financial year on the net profit (income minus expenses including wages and any business operations expenses). Usually you will account for all this in your bookkeeping system and the tax agent will do a tax return for the business, which is very similar to a personal tax return.

    In addition, any business may need to collect and then pay

    • superannuation (11.5% of wages)
    • PAYG component of each employees wage
    • GST if registered (10% of everything the biz sells - 10% of everything the biz buys, noting somethings are GST free)