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  • Eligibility

    To be eligible, 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 and onwards

    $5m

    16%

    $1,000

    We'll work out your offset based on your income tax return. We use your:

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

    See also:

    Working out your offset

    The offset is worked out based on the proportion of tax payable relating to your total net small business income.

    Your aggregated turnover threshold and your rate of offset depends on the income year of your return.

    Your offset will be your rate of offset of the following amount, up to the limit of $1,000:

    'Your total net small business income for the income year' divided by 'Your taxable income for the income year' multiplied by 'Your basic income tax liability for the income year'.

    If your total net small business income is greater than, or equal to, your taxable income, your offset will be your rate of offset of your basic income tax liability for the year. The offset amount will be shown separately on your notice of assessment.

      Last modified: 03 Dec 2020QC 49023