Glossary

Australian small business glossary

Plain-English definitions of the 54 terms, acronyms, and statutes you'll meet running a business in Australia: tax and BAS, payroll and super, invoicing and payments, bookkeeping, employment and Fair Work, allied health, broking, and electrical/solar compliance. Every definition is current for FY2025-26 and links out to the authoritative source (ATO, ASIC, Fair Work, business.gov.au, AHPRA, ACMA, Standards Australia, CEC, Clean Energy Regulator) so you can verify directly. Core tax, payroll and invoicing terms now have full in-depth definitions with worked examples, FAQs and the matching free calculator.

Tax & ATO

GSTGoods and Services Tax: Goods and Services Tax (GST) is Australia's broad-based 10% tax on most goods, services and other items sold or consumed in Australia. Businesses must register once GST turnover reaches $75,000 in any rolling 12-month period, charge 10% on taxable sales, claim credits on business purchases, and report the difference on their BAS.
GST-free vs input-taxed: Two categories of sales that don't add 10% GST, but they work very differently. GST-free sales (basic food, exports, most health and education) carry no GST to the customer, yet the business can still claim GST credits on its related purchases. Input-taxed sales (residential rent, most financial supplies) also carry no GST, but the business cannot claim GST credits on purchases used to make them. The distinction decides whether your input GST is recoverable.
ABNAustralian Business Number: An Australian Business Number (ABN) is a unique 11-digit identifier issued free by the Australian Business Register to entities carrying on an enterprise in Australia. It must appear on your tax invoices and links your GST, PAYG and other registrations. If a supplier provides no ABN, the payer must generally withhold 47% of the payment.
ACNAustralian Company Number: An Australian Company Number (ACN) is a unique nine-digit identifier ASIC issues to every company registered under the Corporations Act 2001. It marks the company as a separate legal entity distinct from its owners. A company's ABN is simply its ACN with two extra check digits in front; sole traders and partnerships never have an ACN.
TFNTax File Number: A Tax File Number (TFN) is a unique nine-digit reference number the ATO issues for life to individuals and entities for tax and superannuation. Employees quote theirs on a TFN declaration when starting a job; if an employee does not provide one, the employer must withhold tax at the top rate of 47%.
BASBusiness Activity Statement: A Business Activity Statement (BAS) is the ATO form GST-registered Australian businesses lodge, usually quarterly, to report and pay GST, PAYG withholding from employee wages, PAYG instalments and certain other taxes. Quarterly BAS is generally due 28 days after the quarter ends; lodging through a registered agent usually extends the deadline.
IASInstalment Activity Statement: An Instalment Activity Statement (IAS) is the simpler ATO activity statement used to report and pay PAYG withholding, PAYG instalments and FBT instalments in the months when a full BAS is not due, or by businesses and investors that are not registered for GST at all.
PAYGPay As You Go: Pay As You Go (PAYG) is the ATO system for paying income tax progressively through the year rather than in one hit. PAYG withholding requires employers to take tax out of wages every pay run; PAYG instalments require businesses and investors to prepay tax on their own income, usually quarterly. Both report on activity statements.
TPARTaxable Payments Annual Report: The Taxable Payments Annual Report (TPAR) is an ATO report of the payments a business made to contractors for building and construction, cleaning, courier and road freight, IT, or security services during the financial year. It is due by 28 August each year, and the ATO data-matches it against contractors' own tax returns.
CGTCapital Gains Tax: Capital Gains Tax (CGT) is the tax on profit from selling or disposing of an asset such as shares, an investment property or business goodwill. It is not a separate tax: the net capital gain is added to your assessable income and taxed at your marginal rate, with a 50% discount for individuals holding assets over 12 months.
FBTFringe Benefits Tax: Fringe Benefits Tax (FBT) is a tax employers pay on non-cash benefits given to employees or their associates, such as private use of a company car, entertainment or low-interest loans. It is charged at a flat 47% on the grossed-up value of benefits over an FBT year running 1 April to 31 March.
Div 7ADivision 7A: Division 7A is an anti-avoidance rule in the tax law that stops private company owners taking company money tax-free as informal loans. A payment or loan to a shareholder or their associate that is not repaid or put on a complying loan agreement by lodgement day is taxed as an unfranked deemed dividend.
Instant asset write-offIAWO: The instant asset write-off is a small business tax concession that lets you deduct the full cost of an eligible asset in the year it is first used or installed ready for use. For 2025-26 the threshold is $20,000 per asset, for businesses with aggregated turnover under $10 million.
DepreciationPrime cost vs diminishing value: Depreciation spreads the cost of a business asset across its effective life, claimed as a tax deduction each year instead of all at once. Australian businesses choose between the prime cost method, which claims equal amounts annually, and the diminishing value method, which claims more in the early years.
Franking creditsDividend imputation: A franking credit is a tax credit attached to an Australian company dividend that represents company tax already paid on the profit being distributed. Shareholders add the credit to their assessable income, then offset it against their own tax, with any surplus refunded, so company profits are not taxed twice.
EOFYEnd of Financial Year: EOFY is 30 June, the end of the Australian financial year. For small businesses it triggers a fixed sequence of obligations: stocktake at 30 June, STP finalisation by 14 July, June-quarter super by 28 July, TPAR by 28 August, and income tax return lodgement by 31 October unless a tax agent extends it.
DSPDigital Service Provider: ATO term for software vendors approved to interact with ATO systems via Standard Business Reporting (SBR). DSPs are listed in the ATO's Software Service Provider Register and meet specific operational and security requirements (whitelist, OSF: Operational Security Framework).
SBRStandard Business Reporting: The framework Australian businesses use to lodge reports (BAS, tax returns, super, payroll) electronically with government agencies via approved software. SBR-enabled software interacts with the ATO Practitioner Lodgement Service (PLS) for tax-agent lodgement.
TPBTax Practitioners Board: The independent statutory body that registers and regulates Australian tax agents, BAS agents, and tax (financial) advisers. Registration is mandatory before charging a fee for any tax-agent services. CPD hours, professional indemnity insurance, and the TPB Code of Professional Conduct are ongoing obligations.

Payroll & super

STPSingle Touch Payroll: Single Touch Payroll (STP) is the ATO's mandatory digital payroll reporting system. STP-enabled software sends salaries and wages, PAYG withholding and superannuation liability to the ATO each time you run payroll. It replaced annual payment summaries; employers instead lodge a finalisation declaration by 14 July after each financial year.
Super GuaranteeSG: The Super Guarantee (SG) is the minimum superannuation contribution employers must pay for employees, set at 12% from 1 July 2025 (the final legislated rate). From 1 July 2026, payday super requires contributions each payday, received by the employee's fund within 7 business days, replacing the old quarterly cycle.
OTEOrdinary Time Earnings: Ordinary Time Earnings (OTE) is the earnings base the Super Guarantee is calculated on: what an employee earns for their ordinary hours of work, including commissions, shift loadings, most allowances and paid leave, but generally excluding overtime. Employers must pay 12% super on OTE, so classifying payments correctly decides whether super is right.
SuperStream: SuperStream is the mandatory electronic standard for paying superannuation contributions in Australia. Employers must send contribution payments and the linked data (employee details, fund, amounts) together in the standard format through payroll software or a clearing house, so funds can allocate money to member accounts automatically.
Salary sacrifice: Salary sacrifice is an arrangement where an employee gives up part of their pre-tax salary in return for a benefit of similar value, most commonly extra superannuation. Sacrificed super is taxed at 15 per cent in the fund instead of the employee's marginal rate, which can be considerably higher.
Novated lease: A novated lease is a three-way salary packaging arrangement between an employee, their employer and a finance company. The employer takes over the employee's car lease payments and deducts them from pre-tax salary, reducing taxable income. If the employee leaves, the lease reverts (novates) back to the employee.
STSLStudy and Training Support Loans (HELP / HECS): STSL is the ATO umbrella for compulsory repayments of government study debts, including HELP (formerly HECS) and VET Student Loans, collected through the tax system. From 2025-26 repayments are marginal: nothing on the first $67,000 of repayment income, then 15 cents per dollar up to $125,000, with higher bands above.

Employment & Fair Work

Modern awardAward & casual loading: A legally binding document setting the minimum pay rates and conditions for employees in a particular industry or occupation; there are 121 modern awards covering most Australian workers. An award sets minimum wages by classification, plus overtime, penalty rates, allowances, and leave loadings on top of the National Employment Standards. Casual employees under an award (or the national minimum wage) receive a 25% casual loading in place of paid leave and other permanent-employee entitlements.
Long service leave: Long service leave is paid leave that rewards extended service with one employer, set by state and territory laws rather than the Fair Work Act. In most jurisdictions employees receive about 8.67 weeks of paid leave after 10 years of continuous service, with pro-rata payouts on termination after 5 to 7 years.
Redundancy payNES severance: Redundancy pay is a National Employment Standards entitlement owed when a role is genuinely no longer needed. The amount scales with continuous service, from 4 weeks' pay after 1 year to a maximum of 16 weeks at 9 years, and is separate from notice periods and unused leave payouts.
Workers compensationWorkCover: Compulsory insurance every Australian employer must hold to cover employees who are injured or become ill because of their work, paying medical costs, lost wages, and rehabilitation. It is administered state by state (WorkCover/WorkSafe in VIC, icare in NSW, WorkCover QLD, ReturnToWorkSA, WorkCover WA, and so on), and premiums are based on industry risk and payroll size. Operating without cover for your workers carries heavy penalties; sole traders with no employees generally arrange their own income protection instead.
SCHADS AwardSocial, Community, Home Care and Disability Services Industry Award 2010: The modern award that covers most Australian aged-care, disability, community services, and home-care employees. Sets minimum pay rates by classification, hour-by-hour overtime and shift loading rules, broken-shift allowances, sleepover rates, and travel-time entitlements that are particularly load-bearing for community-based home-care workers.

Invoicing & payments

Tax invoice$82.50 rule: A tax invoice is the document a GST-registered seller must issue so the buyer can claim back the GST on a purchase. It is required for GST credit claims on purchases over $82.50 including GST, and must show details set by the ATO, including the seller's ABN and the GST amount.
RCTIRecipient-Created Tax Invoice: A recipient-created tax invoice (RCTI) is a tax invoice issued by the buyer of goods or services instead of the seller. The ATO permits RCTIs only where the recipient determines the value of the supply, both parties are GST-registered, and a written RCTI agreement is in place before invoicing.
Payment termsNet 7 / Net 14 / Net 30 / EOM: The agreed window a customer has to pay an invoice. 'Net 30' means payment is due 30 days from the invoice date; 'Net 7' and 'Net 14' are shorter terms common for small jobs and trades. 'EOM' (end of month) means due at the end of the month the invoice was issued; '7 EOM' means seven days after month end. Shorter terms improve cash flow; clear terms on the invoice plus a stated late-payment fee are the simplest way to get paid faster.

Bookkeeping & business basics

Business structuresSole trader vs company vs partnership: The four main ways to structure an Australian business. Sole trader: one person trading under their own TFN, simplest and cheapest, but personally liable for all debts. Partnership: two or more people sharing income and liability, with a partnership TFN and its own return but no separate legal personality. Company (Pty Ltd): a separate legal entity registered with ASIC (gets an ACN), limited liability, taxed at the company rate, more compliance. Trust: assets held by a trustee for beneficiaries, used for asset protection and income distribution.
Cash vs accrual accounting: Two methods of recording income and expenses. Cash basis records a sale when the money is actually received and an expense when it is paid: simple, and what many small businesses use for GST (allowed if turnover is under $10 million). Accrual (non-cash) basis records income when invoiced and expenses when billed, regardless of payment timing; it gives a truer picture of profitability and is required for larger businesses and most company financial statements.
Chart of accountsCOA: The structured list of every account a business uses to record transactions in its bookkeeping, grouped into assets, liabilities, equity, income, and expenses. Each account (for example 'Sales', 'Motor vehicle expenses', 'GST collected') has a code and feeds the profit-and-loss and balance sheet. A well-set-up chart of accounts makes BAS preparation, tax returns, and reporting straightforward; a messy one makes every year-end harder.
Accounts receivable & payableAR / AP: Two opposite sides of business cash flow. Accounts receivable (AR, or debtors) is money customers owe you for invoices you have issued but not yet been paid for (an asset). Accounts payable (AP, or creditors) is money you owe suppliers for bills you have received but not yet paid (a liability). Managing the gap between them is the core of cash-flow control: getting AR in faster and timing AP sensibly keeps a profitable business from running out of cash.
PPSRPersonal Property Securities Register: The national online register of security interests in personal property (anything other than land): vehicles, equipment, inventory, crops. A business that supplies goods on credit or retention of title, or finances assets, registers a security interest so its claim ranks ahead of other creditors if the customer becomes insolvent. Buyers search the PPSR before purchasing a used car or second-hand equipment to check it is not encumbered by an unpaid loan.
Public liability insurance: Cover that protects a business if its operations cause injury to a member of the public or damage to their property, for example a customer slipping at your premises or a contractor damaging a client's home. It pays legal costs and compensation claims. Not legally compulsory for most businesses, but many clients, landlords, and government tenders require proof of public liability cover (commonly $5 million to $20 million) before they will engage you.

Health & care

AHPRAAustralian Health Practitioner Regulation Agency: The national regulator for registered health practitioners across 16 professions including medicine, nursing, physiotherapy, dentistry, psychology, pharmacy, and Aboriginal and Torres Strait Islander health practice. Practitioners must hold current AHPRA registration to practise; the Code of conduct, advertising rules, and continuing professional development requirements are board-set.
HICAPS: Health Industry Claims and Payments Service: the network used by Australian allied-health providers (physio, chiro, dental, optical, etc.) to process private-health-fund extras-cover claims at point of service. Patient pays only the gap; the fund settles the claimed portion directly with the provider.
NDISNational Disability Insurance Scheme: Australia's national scheme providing funding for supports for people with permanent and significant disability. Registered providers must meet the NDIS Practice Standards and submit to NDIS Quality and Safeguards Commission audit. Participants have plans funding categories such as core supports, capacity building, and capital.
HCPHome Care Package: An Australian Government-subsidised package providing aged-care services to support older Australians to live independently at home. Levels 1 (basic) through 4 (high-level care) determine annual funding. Providers must hold approval from the Aged Care Quality and Safety Commission (ACQS Commission) and meet the Aged Care Quality Standards.

Finance & broking

BIDBest Interests Duty: A statutory duty placed on Australian mortgage brokers since 1 January 2021 by the National Consumer Credit Protection Act. Brokers must act in the best interests of borrowers and prioritise borrower interests over their own. ASIC's Regulatory Guide 273 (RG 273) sets out expectations: the recommended product must genuinely meet the borrower's needs, the broker must consider a reasonable range of products, and the reasoning must be recorded.
NCCP ActNational Consumer Credit Protection Act 2009: Commonwealth legislation that regulates consumer credit and the activities of mortgage brokers and other credit providers in Australia. Establishes the Australian Credit Licence (ACL), the Best Interests Duty (BID, since 2021), and ASIC's enforcement role in consumer credit conduct.
RG 273ASIC Regulatory Guide 273: ASIC's regulatory guide setting out how mortgage brokers should comply with the Best Interests Duty (BID) under the NCCP Act 2009. Specifies the expected reasoning, product comparison, and record-keeping a broker must perform when recommending a credit product.

Marketing

Spam Act 2003: Commonwealth legislation regulating the sending of commercial electronic messages (email, SMS, instant messaging) to Australian recipients. Requires explicit, inferred, or implied consent; sender identification on every message; and a functional unsubscribe method that processes within 5 business days. Enforced by the Australian Communications and Media Authority (ACMA); penalties for businesses can reach $2.22 million per day for repeated breaches.

Trades & compliance

AS/NZS 3000Wiring Rules: The joint Australian/New Zealand Standard for electrical installations: the legally referenced 'Wiring Rules' that every licensed electrician must work to. Covers selection, installation, inspection, and testing of low-voltage (≤1000 V AC, ≤1500 V DC) electrical installations. Cited by state regulators (ESV in VIC, Fair Trading NSW, ESO QLD, OTR SA, Building & Energy WA, CBOS TAS, Access Canberra ACT, NT WorkSafe) as the technical basis for Certificates of Electrical Compliance.
AS/NZS 3760In-service safety inspection and testing of electrical equipment: The joint Australian/New Zealand Standard that defines test-and-tag intervals, visual inspection procedures, and electrical safety tests (insulation resistance, earth continuity, polarity) for portable electrical equipment in the workplace. Required by WHS regulators for hostile environments (construction, manufacturing, hire) and by many commercial leases as a building-management condition.
CoCCertificate of Electrical Compliance: The certificate a licensed electrician must issue (and lodge with the state regulator in most states) when prescribed electrical work is completed. Names vary by jurisdiction: CES (VIC), CCEW (NSW), Form 14 (QLD), eCoC (SA, WA), Certificate of Compliance for Electrical Work (TAS, ACT, NT). All serve the same function: a sign-off that the work meets AS/NZS 3000 and the relevant state Electricity Safety Act/regulations.
CECClean Energy Council: The peak body for Australia's clean-energy industry. Administers the accreditation scheme for solar PV, battery storage, and grid-connected hybrid system designers and installers. CEC accreditation is mandatory for an installer to create Small-scale Technology Certificates (STCs) on the REC Registry, and for participation in most state rebates (VIC SVS, NSW PDRS, SA HEER).
STCSmall-scale Technology Certificate: A tradeable certificate created under the Australian Government's Small-scale Renewable Energy Scheme (SRES) when an eligible small-scale renewable system (solar PV ≤100 kW, solar water heater, heat pump HWS) is installed. One STC equals one MWh of expected generation/displacement. STCs are sold via the open market or the Clearing House (fixed $40 less fees). Created on the Clean Energy Regulator's REC Registry by a CEC-accredited installer (PV) or registered agent.
DNSPDistribution Network Service Provider: The regulated distribution-network operator responsible for the poles, wires, and meters in a given Australian region. Solar PV and battery grid-connections require a DNSP pre-approval (form varies by network: AusNet, Powercor, CitiPower, United Energy, Jemena in VIC; Ausgrid, Endeavour, Essential in NSW; Energex, Ergon in QLD; SAPN in SA; Western Power in WA; TasNetworks in TAS; Evoenergy in ACT; Power and Water in NT). Export-limit, inverter standards (AS/NZS 4777.2), and connection capacity rules are DNSP-set.

Last reviewed and updated: 16 July 2026 by Bishal Shrestha