ATO reporting for Sole Traders

Greetings to everyone! Today we will discuss what you need to report to the ATO as a business owner.

First part of our story you can find here: How to open a business as a sole trader

Tax return

There is no separate tax return that you have to file on top of your individual tax return as a sole trader. All of your business related information will be included in your Individual Tax Return. Previously, as an employee, you reported your salary under section INCOME and your expenses under section DEDUCTIONS. Now your tax return will be completed differently. All your income and expenses related to your business have to be included in a section called Business and professional items

This ATO link will help you to complete this schedule: Business and professional items schedule

This ATO link will help you to understand your income and deductions you can claim: Income and deductions for business

Otherwise, you always can ask your accountant for help.

If you are preparing and lodging your tax return yourself, you need to lodge it no later than 4 months after the end of the financial year (31^st of October). If your accountant is doing it for you, then the due date will be 8.5 months after the end of the financial year (15^th of May).

BAS (Business Activity Statement)

Depending on your registration you will lodge your BAS monthly, quarterly, or on an annual basis. Your BAS needs to include your total sales, GST reporting, Salary paid to your employees and PAYG Withheld on it (if you are paying salary), PAYG Instalments (your upfront income tax instalments), FBT (Fringe Benefit Tax, if you are providing certain benefits to your employees), other taxes, if registered (Luxury car tax (LCT), Wine equalisation tax (WET), Fuel tax credits)

Please note – as a sole trader, you can’t pay a salary to yourself. Instead, all net profit for the year will be your income.

STP (Single Touch Payroll)

If you have employees, you will need to report wages and superannuation paid to the ATO. This way your employees will receive their salary and superannuation information via MyGov. Here is information about STP requirements from ATO:  Single touch payroll

As reporting is digital, you will need to find a STP software. Here is a list of low cost software providers if you have 1-4 employees: No cost and low cost solutions for single touch payroll.

You will file your payroll information with the ATO each pay.

Also, at the end of each year you will need to make a final declaration via STP software by 14^th July if you have more than 20 employees, or by the 31^st of July if you have 19 or less employees.

TPAR (Taxable payments annual report)

You may need to lodge a TPAR by 28^th August each year if you are a business providing: building and construction services; cleaning services; courier services; road freight services; information technology (IT) services; security, investigation or surveillance services. For more information: Taxable payments annual report

FBT (Fringe benefits tax)

If you provide benefit payments to your employees other than salary/wages, you may need to report and pay a separate tax, FBT, by 21 May: Fringe benefits tax