If you operate your business as a sole trader, you must lodge an individual tax return to report your taxable income or loss. This includes:
- your assessable business income less the business deductions you can claim
- any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income, less any allowable deductions against this income.
You may also have to complete other forms and schedules: see Working out which form to report on.
Partnerships
If you operate your business as a partnership, the partnership lodges a partnership tax return to show its net income. This includes the partnership's income less expenses and deductions. The partnership may also have to complete other forms and schedules - see Working out which form to report on.
As one of the partners, you must also report the following on your individual tax return:
- your share of any partnership net income or loss
- any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
Trusts
If you operate your business as a trust, the trust lodges a trust tax return to show its net income or loss. This is the trust's income less expenses and deductions. The trust may also have to complete other forms and schedules - see Working out which form to report on.
As a trust beneficiary, you must also report the following on your personal income tax return:
- any income you receive from the trust
- any other assessable income, such as salary and wages (shown on a payment summary), dividends and rental income.
Annual assessment
After lodging your personal tax return, we will issue you with an annual assessment showing either the amount of tax you have to pay or your refund. The assessment takes into account any:
- PAYG withheld amounts
- PAYG instalments you have been credited with for the income year
- tax offsets you are entitled to claim.
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Remember, as a sole trader, partnership or trust, you only report your taxable income and net income or loss. You do not have to work out the amount of tax you are liable to pay - we will do this for you.
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Tax rates
If you are an Australian resident, the rate at which you pay personal income tax is shown in the following tables. If you are a foreign resident, you must pay tax on all your taxable income as you do not qualify for the tax-free threshold of $6,000.
You may be eligible to claim a tax offset depending on:
- whether you maintain a dependant
- whether you live in a remote area
- how much taxable income you earned.
The following rates do not include the Medicare levy of 1.5% or the Medicare levy surcharge of 1% which can apply in some circumstances.
Tax rates 2010-11 and 2011-12
Taxable income
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Tax payable
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$0-$6,000
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Nil
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$6,001-$37,000
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15% of amount over $6,000
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$37,001-$80,000
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$4,650 plus 30% of amount over $37,000
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$80,001-$180,000
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$17,550 plus 37% of amount over $80,000
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Over $180,000
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$54,550 plus 45% of amount over $180,000
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Medicare levy
If you are an Australian resident and your taxable income is above the 'low income threshold', it is likely you will have to pay 1.5% of your taxable income as a Medicare levy. You may also have to pay the 1% Medicare levy surcharge if you do not have a complying private health insurance policy and your taxable income is more than the specified threshold. For the 2010-11 income year the thresholds are:
- $77,000 - if you are single with no dependent children
- $154,000 - if you have a spouse or dependent child.
This amount increases by $1,500 for each dependent child after the first.
Sections within Lodging an annual tax return
Last Modified: Tuesday, 4 October 2011