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  • Small business income tax offset

    The small business income tax offset (also known as the unincorporated small business tax discount) can reduce the tax you pay by up to $1,000 each year.

    The offset, which is worked out on the proportion of tax payable on your business income, is:

    • 8% for the 2016–17 income year onwards
    • 5% for the 2015–16 income year.

    The offset will increase to:

    • 10% in 2024–25
    • 13% in 2025–26
    • 16% in 2026–27.

    To be eligible for the offset, you must be carrying on a small business as a sole trader, or have a share of net small business income from a partnership or trust. The small business must have an aggregated turnover less than:

    • $5 million for the 2016–17 income year onwards
    • $2 million for the 2015–16 income year.

    We will work out your offset based on the amounts you show in your income tax return. These amounts are your:

    • net small business income that you earned as a sole trader
    • share of net small business income from a partnership or trust.

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      Last modified: 16 Aug 2017QC 49023