Running a business means juggling a lot, and tax is one of those things that’s easy to put off, especially when you’re not sure what you actually owe. If you’re asking “how much tax should I pay?”, the real answer is: it depends. But with the right structure, strategy and support, it’s absolutely something you can stay on top of, without the guesswork.
What Determines How Much Tax You Pay?
The amount of tax your business owes comes down to four main things:
- How your business is structured
- How much profit you’ve made
- What expenses you’re claiming
- And any extra tax obligations like GST, PAYG, or super
For example, sole traders are taxed differently from companies. Claiming legitimate deductions reduces your taxable income. And if you haven’t planned ahead, surprise bills can hit your cash flow hard. That’s why it’s not just about what you owe, it’s about how you prepare for it.
Structure Shapes Your Strategy (and Your Tax Bill)
Sole traders are taxed like individuals, which can mean rates up to 45 percent. Companies are taxed at a flat 25 percent, but that profit stays in the business unless it’s paid out as a dividend and taxed again. Trusts and partnerships offer more flexibility, but they’re not something you want to navigate solo. The real kicker? Your structure doesn’t just affect how much tax you pay. It shapes how you grow, how you pay yourself, and how smoothly your business runs. If it hasn’t had a health check in a while, now’s a good time.
Know the Current Tax Rates
If you’re paying tax as an individual (like most sole traders), here are the 2024–25 brackets:
Taxable Income | Tax Rate |
First $18,200 | No tax |
$18,201 to $45,000 | 19% |
$45,001 to $120,000 | 32.5% |
$120,001 to $180,000 | 37% |
Over $180,000 | 45% |
Note: The Medicare Levy of 2% generally applies on top of these rates.
If your business is set up as a company, you’re generally looking at a flat 25% rate, which can offer more predictability and better tax planning opportunities, depending on your setup.
Deductions Aren’t Just a Bonus. They’re Essential!
Claiming the right business deductions can make a big difference. We’re talking day-to-day operating costs, tools, tech, home office, vehicle use, and even depreciation on equipment.
But to claim confidently, you need clean records and clarity on what’s actually allowed. That’s where we’ve got your back. No dodgy claims, no missed chances, just good clean numbers the ATO won’t blink at.
What Happens If You Get It Wrong?
A lot of small business owners get caught off guard by tax debt. Whether it’s forgetting to set money aside, missing a lodgement, or not realising GST was due, it adds up fast. The ATO doesn’t mess around with penalties and interest. And more than that, stress around tax can stall your business momentum. You don’t need that. You just need a clear plan.
So... How Much Tax Should You Pay?
The honest answer is: only what you legally owe and nothing more.
Getting that number right means:
- Using the right business structure
- Staying on top of your financials
- Claiming the deductions you’re entitled to
- And planning ahead, so you’re not caught short
We help clients do exactly that. We cut through the complexity, make the numbers make sense, and keep your tax strategy aligned with your business goals.
Tax Advice That Respects Your Time
At Propeller, we work with service-based business owners who don’t have time to second-guess their tax. You want to focus on running your business, not decoding the tax system. We’ll help you understand exactly what you owe, when you owe it, and how to stay ahead. No jargon. No lectures. Just clear, smart advice built around your business.
Book a Tax Planning Session
If you’re still wondering how much tax you should pay, that’s your cue to reach out. Book a tax planning session with our team and walk away with answers, clarity, and a plan that fits your business.
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