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Small business income tax offset

How to complete the small business income tax offset sections of your tax return using myTax.

Last updated 14 November 2016

The maximum offset is $1,000 per year per person from all your sources of small business income.

See also:

Eligible income

The offset is worked out on your net income (not gross income), which is your:

  • sole trader net small business income (business income after deductions)
  • share of partnership or trust net small business income less your deductions relating to that share.

Only include eligible income for the offset. The following types of income are not eligible:

  • personal services income (unless from a personal services business)
  • salary and wages
  • director's fees
  • government payments
  • interest and dividends (unless related to a business activity).

Report your business income

Amounts you enter at the Small business income tax offset question are not included in your taxable income. These amounts are only used to work out your offset.

So we can work out your offset correctly, you need to report your business income in two places:

  • at Business income or losses (located at the Business/sole trader, partnership and trust income (including loss details) section) – so it counts towards your taxable income
  • at Small business income tax offset (under the Offsets section) – this is where you are now.

To claim this offset, you must also report other applicable types of business income at the relevant income sections. These include:

  • farm management repayments
  • foreign business income
  • interest and dividend income from carrying on your business.

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