Company & Business Tax Calculator Australia
Bridge accounting profit to estimated company taxable income, apply a selected corporate tax rate, limit tax offsets to gross tax, deduct PAYG instalments and credits, and expose the assumptions behind the cash balance.
BRIDGE
Company tax bridge inputs
Indicative tax return bridge
What this company tax calculator does
The calculator starts with accounting profit before income tax and creates a visible tax bridge. Non-deductible accounting expenses and assessable income outside the accounts increase the tax result. Tax deductions not recorded as accounting expenses and verified carried-forward losses reduce it. Taxable income is capped at zero because this page does not calculate a current-year tax benefit for a tax loss.
It multiplies positive taxable income by the selected company rate. Verified non-refundable offsets reduce gross tax only to zero. PAYG instalments and refundable credits are then subtracted to estimate a cash amount payable or refund. The accounting tax provision is compared with liability after offsets, not with the cash balance, because instalments are payments or credits rather than a change to current tax expense.
Accounting profit is not taxable income
Financial accounts apply accounting standards and business policies, while the tax law determines assessable income and deductions. Depreciation is a familiar difference: accounts may use one useful life and method while tax decline-in-value rules or temporary incentives produce another amount. Provisions, entertainment, penalties, private expenses and some legal costs can also be treated differently.
An add-back does not mean an expense was fake or unnecessary. It means the entered accounting expense is not deductible in the tax calculation being modeled. Conversely, a tax deduction outside accounting profit can arise from timing or specific law. Maintain a schedule for every adjustment with the account balance, tax treatment, evidence and whether the difference reverses later.
The 25% and 30% company rate scenarios
The lower 25% rate applies to a company that qualifies as a base rate entity for the relevant income year. The ATO’s rules include an aggregated-turnover threshold and a limit involving base rate entity passive income. The 30% rate applies to other companies unless a special rate applies. Entity type, connected entities and the character of income therefore matter; turnover alone is not the complete test.
Selecting 25% does not assert eligibility. The status message deliberately asks for confirmation. The custom rate supports a professionally determined special rate or sensitivity test, but it does not convert the model into an individual, trust or partnership calculator. Sole traders report business income in their individual return and use individual marginal rates rather than a flat company rate.
Business income and deductions
Assessable business income can include sales, service fees, cash and electronic receipts, investment income, capital proceeds adjustments and other amounts. GST collected is generally handled through the GST system rather than treated as ordinary revenue when accounts are GST-exclusive, but bookkeeping methods vary. Reconcile the income tax bridge to the accounting trial balance and business activity statements.
Deductions generally require a connection with earning assessable income and must not be private, domestic or capital unless a specific rule allows treatment. Timing, substantiation and prepayment rules can change the year. Capital assets may be deductible over time rather than immediately. Related-party payments, shareholder loans, trust distributions, bad debts and trading stock can need specialised analysis.
Tax losses need separate proof
A carried-forward company tax loss is not automatically available. Continuity of ownership, same business or similar business rules and integrity provisions may apply. Capital losses can generally be used only against capital gains, not ordinary taxable profit. The calculator has one loss field, so enter only the ordinary tax-loss amount confirmed for this specific year and bridge.
If deductions and losses reduce the modeled result below zero, taxable income is displayed as zero and the unused negative bridge is not described as a carried-forward loss. Its availability and value require a return-level calculation. Do not enter the same loss both as a deduction and in the loss field.
Offsets, instalments and the cash balance
Non-refundable offsets are capped at gross tax in this model. Real offsets can have ordering, carry-forward, refundable and grouping rules. The research and development tax incentive, foreign income tax offsets and franking deficit consequences cannot be reduced to a generic cash field safely. Enter only an amount calculated under the relevant provisions.
PAYG instalments are prepayments toward expected income tax. They affect the return balance but do not change taxable income or the company rate. A refund result means entered credits exceed the modeled liability; it does not guarantee the ATO will issue that amount because other accounts, debts, amendments and return items can affect processing.
Provision and after-tax profit
After-tax accounting profit here subtracts modeled liability after offsets from accounting profit. It is a simple current-tax view and excludes deferred tax, prior-year adjustments and tax recorded directly in equity or other comprehensive income. A negative accounting profit with positive taxable income is possible after add-backs, so interpret the percentage cautiously.
Provision variance compares the entered accounting provision with modeled liability. A higher modeled liability suggests an under-provision in this simplified bridge; a lower liability suggests an over-provision. Investigate the source rather than posting the difference automatically. Instalments are not included in the provision variance.
Dividends and franking are outside the cash balance
Paying company tax can create franking credits in a company’s franking account, but the amount available to attach to a dividend depends on actual tax payments, refunds, prior balances, distributions and other franking events. The selected company tax rate and the corporate tax rate for imputation purposes can also require separate confirmation. This page does not turn estimated tax liability into a distributable franking balance.
After-tax accounting profit is not automatically cash available for dividends. Working capital, loan covenants, solvency, retained losses, asset purchases and Corporations Act requirements matter. A dividend can also create shareholder tax consequences that depend on the recipient. Prepare a separate dividend and franking workpaper after the company tax return bridge is finalised.
Tax consolidation, trusts, partnerships, Division 7A shareholder transactions and international dealings also sit outside the model. Groups should reconcile entity-by-entity accounting results to the head company’s tax calculation where consolidation applies. Related-party charges and transfer pricing require evidence beyond a percentage estimate.
Company tax workpaper checklist
| Bridge item | Evidence | Common review |
|---|---|---|
| Accounting profit | Final trial balance and signed financial statements | Income tax expense excluded from starting figure |
| Add-backs | General ledger detail and tax treatment | Private, capital, penalty, provision and entertainment amounts |
| Additional deductions | Tax depreciation and deduction workpapers | Timing, substantiation and double counting |
| Losses | Prior returns and continuity analysis | Ordinary versus capital loss and available balance |
| Rate | Aggregated turnover and passive-income test | Base rate entity or other company |
| Credits | ATO account, instalment notices and offset schedules | Refundability and correct income year |
Frequently asked questions
What company tax rate should an Australian company use?
A qualifying base rate entity may use 25%; other companies generally use 30%, subject to special rules. Confirm the relevant income year, aggregated turnover and passive-income test.
Can a sole trader use the 25% company tax rate?
No. A sole trader’s business result is included in the individual’s tax return and taxed under individual rules. This page models a company entity.
Why are PAYG instalments deducted after tax is calculated?
They are credits or prepayments against the liability, not deductions from taxable income. They change the cash balance on assessment rather than the tax rate.
Can tax offsets create a negative gross company tax here?
No. The non-refundable offset field is capped at gross tax. Refundable offsets need their own verified treatment and can be included in the credit field only after professional calculation.
Does the calculator include GST or payroll tax?
No. GST, payroll tax, fringe benefits tax and other obligations are separate systems. Enter an accounting profit and tax adjustments already reconciled appropriately.
Does a tax loss automatically create a refund?
No. A tax loss can reduce taxable income subject to eligibility rules, but it is not itself a cash refund. Loss carry-back or refundable offsets require separate conditions and calculations.