Your Indigenous corporation delivers important services to your community. Managing your money well helps keep those services running.
If you need help with your corporation's tax affairs, we can help. You might also be interested in reading about the following:
- Is your organisation a not for profit?
- Registering as a not for profit
- Tax concessions essentials
- Applying for an ABN External Link
- Employers superannuation
There are many tax concessions available to non-profit organisations. Some organisations:
- do not have to pay income tax
- can receive tax-deductible donations.
For example, public benevolent institutions and charities may not have to pay income tax or fringe benefits tax, and receive GST concessions.
If you receive a grant or funding to run your Indigenous corporation, you may need to pay GST. You will need to keep some money aside to pay the ATO any tax due on your grant.
How much GST to pay
As a first step, you should ask us whether you need to pay GST on your grant and what your options are.
Your corporation may be asked to provide a tax invoice to receive the funding. The tax invoice should include a GST amount owed.
Sometimes the people giving you the funding will give you a tax invoice that shows how much GST to pay.
In both cases, the amount of GST will usually be 10% of the grant.
You have to report these grants in your activity statements and pay the GST.
The newly registered Community Services Aboriginal Corporation provides health, legal and welfare services to its Aboriginal clients. The corporation employs 16 people, including a youth justice worker and health and community care workers.
The office manager Trish, calls the ATO and finds out the corporation qualifies as an exempt organisation.
This means the corporation does not have to pay income tax.
Trish then applies for an Australian business number (ABN) to make it easier for her when dealing with us and other government agencies. She registers herself as the authorised contact so we can call her if we need to.
Trish has done everything she can to make the corporation run smoothly so they can concentrate on service delivery to members and clients.
You'll generally need to pay super guarantee contributions to an employee's super fund regardless of how much they are paid. This applies to full-time, part-time and casual staff. If your employee is under 18 years, to be eligible for super they need to work for you more than 30 hours in a week.
Prior to 1 July 2022, to be eligible for super an employee needed to be paid $450 or more (before tax) in salary and wages per month.
How much super to pay
You need to pay the current super guarantee rate, a minimum percentage of the amount an employee earns for his or her normal hours of work.
Where to pay your super contributions
You need to pay contributions into a complying super fund or retirement savings account by the quarterly cut-off dates. Your employees can choose the super fund you pay their super contributions into.
If you don't meet your super obligations
If you don't pay your employees super they are entitled to, you'll have to pay a superannuation guarantee charge to us.
Trish knows the corporation has certain duties as an employer, like paying super.
Trish calls us to find out how much super the staff need to be paid. She also finds out that staff can choose which super fund they want their money paid into. Once they've told her where they want their money to go, she organises for it to be sent to the super fund.Important tax and superannuation matters Indigenous corporations need to know about.