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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 is worked out on the proportion of tax payable on your business income.

    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 of less than $5 million for the 2016–17 income year onwards.

    Table: Progressive changes to the small business income tax offset

    Income year

    Aggregated turnover threshold

    Rate of offset

    Maximum offset

    2015–16

    $2m

    5%

    $1,000

    2016–17 to 2019–20

    $5m

    8%

    $1,000

    2020–21

    $5m

    13%

    $1,000

    2021–22

    $5m

    16%

    $1,000

    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: 30 Oct 2018QC 49023