• Tax rates

    Non-profit companies

    From 1 July 2015, the income tax payable for non-profit companies depends on the level of taxable income and whether they are a small business entity.

    Before 1 July 2015, the rates of tax and taxable income levels were the same for all non-profit companies (regardless of whether they are small business entities).

    The tables below set out the rates of tax and taxable income levels.

    Table: Non-profit company income tax rates - from 1 July 2015

    Non-profit companies that are small business entities

    Other non-profit companies

    Taxable income

    Rates of tax

    Taxable income

    Rates of tax

    0 - $416

    Nil

    0 - $416

    Nil

    $417 - $863

    55% for every dollar over $416

    $417 - $915

    55% for every dollar over $416

    $864 and above

    28.5% for every dollar

    $916 and above

    30% for every dollar

    Note: If the taxable income is $864 or more, the whole amount is taxable.

    Note: If the taxable income is $916 or more, the whole amount is taxable.

    Table: Non-profit company income tax rates – before 1 July 2015

    Taxable income

    Rates of tax

    0 - $416

    Nil

    $417 - $915

    55% for every dollar over $416

    $916 and above

    30% for every dollar

    Note: If the taxable income is $916 or more, the whole amount is taxable.

    Tax rate examples

    If the taxable income is $416 or less for a year, no tax is payable.

    Example: Nil rate of tax

    A non-profit company has taxable income of $416.84 in 2015-16.

    The income tax is nil.

    It is calculated as $416 x  nil.

    End of example

    If a non-profit company has a taxable income between $417 and $915 (or $863 for a small business entity from 1 July 2015) inclusive, the amount in excess of $416 is taxed at 55%.

    Example: 55% rate of tax

    A non-profit company has taxable income of $703.48 in 2015–16.

    The income tax is $157.85.

    It is calculated as ($703 - $416) x 0.55.

    End of example

    For the 2015–16 income year onwards, if the taxable income is more than $863 for a non-profit company that is a small business entity, the tax rate of 28.5% is applied to all the taxable income.

    Example: 28.5% rate of tax

    A non-profit company that is a small business entity has taxable income of $925.34 in 2015–16.

    The income tax is $263.62.

    It is calculated as $925 x 0.285.

    End of example

    The ordinary company tax rate of 30% is applied to all the taxable income if the taxable income is more than $915 for either:

    • any non-profit company in the 2014–15 income year and earlier
    • a non-profit company that is not a small business entity in the 2015–16 income year onwards.

    Example: 30% rate of tax

    A non-profit company that is not a small business entity has taxable income of $2,182.92 in 2015–16.

    The income tax is $654.60.

    It is calculated as $2,182 x 0.30.

    End of example

    Other taxable companies

    Other taxable companies are taxable from the first dollar. That is, they are taxable on all levels of taxable income and there is no threshold.

    From 1 July 2015, the rate of tax is:

    • 28.5% if the company is a small business entity
    • 30% if the company is not a small business entity.

    Before 1 July 2015, the rate of tax is 30% (regardless of whether a company is a small business entity).Example: 30% and 28.5% rates of tax

    In 2014–15, an 'other taxable company' is a small business entity and it has taxable income of $1,109.43.

    The income tax is $332.70.

    It is calculated as $1,109 x 0.30.

    In 2015–16, the company remains a small business entity and has taxable income of $1,502.86.

    The income tax is $428.07.

    It is calculated as $1,502 x 0.285.

    End of example

    Small business entity

    Your organisation is a small business entity if it is a company that:

    • is carrying a business for all or part of the year
    • has an aggregated turnover of less than $2 million – that is, your organisation's annual turnover plus the annual turnovers of any businesses it is connected or affiliated with.

    To work out if your organisation is carrying on a business, see Nature of trade.

    Turnover includes all ordinary income that your organisation earns in the ordinary course of business for an income year.

    If your organisation is a non-profit company, its ordinary income includes its income from members.

    Table: Turnover of non-profit companies

    Include these amounts

    Do not include these amounts

    • revenue from sales to members and non-members
    • fees for services provided to members and non-members
    • interest from business bank accounts

     

    • GST the company has collected on a transaction
    • amounts borrowed for the business
    • proceeds from the sale of business capital assets

     

    If your organisation is an 'other taxable' company, do not include mutual receipts in the calculation of aggregated turnover as they are not income.

    See also:

    Taxable income and mutuality

    The taxable income of a club, society or association is calculated in the same way as a company for tax purposes.

    One particular aspect that affects many clubs, societies and associations is mutual dealings with members.

    We explain how to identify whether a person is a member of an organisation.

    As a result of the mutuality principle, revenue and expenditure of an organisation falls within one of three categories for income tax purposes.

    We explain how the categories are used in calculating taxable income.

    Find out about:

      Last modified: 23 Jun 2016QC 23099