From 1 July 2015 a new two-tier company tax system took effect and applies to all companies. This system sees the whole of a company’s taxable income subject to the following rates:

  • 28.5% if the company’s aggregated turnover is below a $2 million threshold (i.e. a small business entity)
  • 30% if the company’s aggregated turnover is equal to or above a $2 million threshold.

Companies don’t need to do anything now. If identified as a small business, the new rate will be automatically applied to their PAYG instalments rate or on their next activity statement.

Where a small business has a late balancing substituted account period (SAP), their PAYG instalments will be adjusted from their first 2015–16 instalment period. For early balancing SAPs, the reduced rate will not apply until their 2016–17 income year.


Reproduced from the Australian Taxation Office website: 

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