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.

Tax & ATO

GSTGoods and Services Tax: Australia's broad-based 10% consumption tax, applied to most goods, services, and imports. To add GST: multiply by 1.1; to extract GST from a GST-inclusive total: divide by 11. GST registration is mandatory once turnover reaches $75,000 in any rolling 12-month period ($150,000 for non-profits, or from day one for taxi/rideshare drivers). Most basic foods, exports, and certain education and healthcare services are GST-free.
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 11-digit identifier issued by the Australian Business Register (ABR) at no cost. Required for any business issuing tax invoices in Australia. Sole traders, companies, partnerships, and trusts each apply with their own TFN. Without an ABN on an invoice, the buyer must withhold 47% of the payment and remit it to the ATO (no-ABN withholding).
ACNAustralian Company Number: A 9-digit identifier issued by ASIC to every company registered under the Corporations Act 2001 (a Pty Ltd or public company). The ABN of a company is its 9-digit ACN with two extra digits in front. Sole traders and partnerships have no ACN — only registered companies do. The difference: an ABN identifies any business for tax (GST, invoicing); an ACN identifies a company as a separate legal entity registered with ASIC.
TFNTax File Number: A 9-digit personal tax identifier issued by the ATO. Required to lodge a tax return, work as an employee (via TFN declaration), claim government benefits, or open most bank accounts. Sole traders use their personal TFN for the business; companies, partnerships, and trusts get a separate TFN for the entity.
BASBusiness Activity Statement: The ATO form Australian businesses lodge to report GST collected on sales, GST credits claimed on purchases, PAYG withholding from employee wages, PAYG instalments toward income tax, and (where applicable) Fringe Benefits Tax. Quarterly BAS is due 28 days after the end of each quarter; lodging via a registered tax agent or BAS agent extends the due date by approximately four weeks.
IASInstalment Activity Statement: A simpler ATO statement than the BAS, used by businesses and individuals not registered for GST to report and pay PAYG instalments, PAYG withholding, and FBT instalments. Employers registered for GST who lodge BAS quarterly but withhold tax monthly use an IAS in the two months between quarterly BAS lodgements. Due dates mirror the relevant BAS/PAYG cycle (typically 21 or 28 days after period end).
PAYGPay As You Go: Two separate systems: PAYG withholding (employer withholds income tax from wages each pay run, remits to ATO via STP) and PAYG instalments (business or sole trader pre-pays income tax in quarterly instalments based on prior-year income). Both report on the same BAS.
TPARTaxable Payments Annual Report: An annual ATO report of the total payments a business made to contractors and subcontractors during the financial year. Mandatory for businesses in building and construction, cleaning, courier and road freight, IT, and security/investigation/surveillance services that pay contractors. It is lodged separately from the BAS and is due by 28 August following the 30 June year end. The ATO data-matches the report against contractors' own returns to detect undeclared income.
CGTCapital Gains Tax: The tax on the profit (capital gain) made when you sell or dispose of an asset such as shares, investment property, or business goodwill. CGT is not a separate tax — the net gain is added to your assessable income and taxed at your marginal rate. Individuals and trusts who hold an asset for at least 12 months get a 50% CGT discount, paying tax on only half the gain (companies get no discount; complying super funds get one-third). A capital loss can offset capital gains but not other income. Work out a gain with the OneBookPlus capital gains tax calculator.
FBTFringe Benefits Tax: A tax employers pay on certain non-cash benefits provided to employees or their associates — company cars for private use, entertainment, expense reimbursements, low-interest loans. FBT is separate from income tax and is calculated on the grossed-up taxable value of benefits at a flat rate of 47% (unchanged for the FBT years ending 31 March 2023 through 31 March 2027). The FBT year runs 1 April to 31 March, not the standard financial year. Estimate liability with the OneBookPlus FBT calculator.
Div 7ADivision 7A loan: Anti-avoidance rules in the Income Tax Assessment Act 1936 that stop owners of a private company taking money out tax-free disguised as a loan. If a company lends money to a shareholder or associate and the loan is not repaid or put on a complying loan agreement (minimum interest at the ATO benchmark rate, maximum 7-year term, or 25 years if secured) by the company's lodgement day, the amount is treated as an unfranked deemed dividend and taxed in the recipient's hands.
Instant Asset Write-OffIAWO: A small-business tax concession letting eligible businesses immediately deduct the full cost of an asset in the year it is first used or installed ready for use, rather than depreciating it over years. For 2025-26 the threshold is $20,000 per asset (applied per asset, so multiple assets can each be written off), available to businesses with aggregated turnover under $10 million using simplified depreciation. The threshold is legislated year-by-year and reverts to $1,000 unless Parliament extends it — check the current cap each EOFY. Estimate the deduction with the OneBookPlus depreciation calculator.
DepreciationPrime cost vs diminishing value: Spreading the cost of a business asset across its effective life as a deduction, instead of claiming it all in one year. Two methods: prime cost (straight-line) claims an equal amount each year over the asset's effective life; diminishing value claims a fixed percentage of the asset's declining written-down value, giving larger deductions early on. Assets under the instant asset write-off threshold can be deducted immediately; the rest go into a small-business pool or are depreciated individually.
Franking creditsDividend imputation: A tax credit attached to a dividend representing company tax already paid on the profit being distributed. Under Australia's dividend imputation system, a shareholder receiving a franked dividend grosses up the dividend by the franking credit, includes both in assessable income, then claims the credit against their own tax — so the profit is not taxed twice. If the shareholder's marginal rate is below the company rate, surplus franking credits can be refunded.
EOFYEnd of Financial Year: 30 June each year in Australia. Triggers a sequence of tax-and-payroll obligations: stocktake at 30 June for businesses carrying trading stock; STP finalisation declaration by 14 July; quarterly super for the June quarter due 28 July; income tax return lodgement by 31 October (later if using a tax agent).
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: The ATO's mandatory real-time payroll reporting system. Each pay run sends payment, withholding, and super contribution data to the ATO at the time of the payroll, replacing the previous annual payment summary process. STP Phase 2 (mandatory since 1 January 2022) expanded the data set to include itemised allowances, country codes for visa workers, and disaggregation of gross.
Super GuaranteeSG: The minimum superannuation contribution Australian employers must pay on behalf of employees, calculated as a percentage of ordinary times earnings. The rate stepped up 0.5% per year from 9.5% to reach 12% on 1 July 2025. Quarterly contributions are due 28 days after the end of each quarter. Late contributions trigger the Super Guarantee Charge — non-deductible interest, admin fee, and component differences.
OTEOrdinary Time Earnings: The earnings base on which Super Guarantee is calculated — broadly, what an employee earns for their ordinary hours of work, including over-award payments, commissions, shift loadings, and most allowances. It generally excludes overtime worked outside ordinary hours. Getting OTE right matters because employers must pay 12% super on OTE; misclassifying a payment as non-OTE underpays super and triggers the Super Guarantee Charge.
SuperStream: The mandatory standard for sending superannuation contribution data and payment electronically. Employers must send contribution data and payment together in the SuperStream-compliant format using a clearing house (the ATO offers one free for businesses with under 20 employees) or SBR-enabled payroll software.
Salary sacrifice: An arrangement where an employee agrees to forgo part of their pre-tax salary in return for a benefit of similar value — most commonly extra superannuation, but also cars, devices, or expenses. Because the sacrificed amount is paid from pre-tax income, it reduces the employee's taxable income; super contributions made this way are concessional and taxed at 15% in the fund (subject to the concessional contributions cap). The arrangement must be agreed in advance, before the income is earned.
Novated lease: A three-way car-finance arrangement between an employee, their employer, and a finance company. The employee leases a vehicle, but the employer takes on the lease payments and deducts them from the employee's salary before tax (salary packaging), reducing taxable income. The lease 'novates' back to the employee if they leave. Electric vehicles under the luxury car tax threshold can be FBT-exempt, making EV novated leases especially tax-effective.
STSLStudy and Training Support Loans (HELP / HECS): The ATO umbrella for compulsory repayments of government study debts — HELP (formerly HECS), VET Student Loans, and similar schemes — collected through the tax system once income passes the threshold. For 2025-26 the minimum repayment threshold rose to $67,000, and a new marginal system charges the repayment only on income above the threshold (15 cents per dollar from $67,001 to $125,000, then higher bands). Employers withhold extra PAYG from pay to cover the expected repayment. Estimate yours with the OneBookPlus HECS-HELP repayment calculator.

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: Paid leave that accrues for staying with one employer over a long period. Entitlements are set by each state and territory (and a few federal awards), so the rules differ: in most states an employee qualifies for a block of paid leave after 7 to 10 years of continuous service, with pro-rata access after 7 years in many jurisdictions if employment ends. It is calculated on ordinary pay and must be paid out on termination once the pro-rata threshold is met. Estimate an entitlement with the OneBookPlus long service leave calculator.
Redundancy payNES severance: A National Employment Standards entitlement paid when a job is made genuinely redundant (the role is no longer needed), separate from notice. The amount is a sliding scale based on continuous service, from 4 weeks' pay at 1 year up to a maximum of 16 weeks at 9 years, then dropping to 12 weeks at 10+ years (because long service leave usually pays out then). Employees of a small business with fewer than 15 staff, and those with under 12 months' service, are generally not entitled. Estimate it with the OneBookPlus redundancy pay calculator.
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: The document a GST-registered seller must issue so the buyer can claim a GST credit. You only need a valid tax invoice to claim a GST credit on a purchase costing more than $82.50 (GST-inclusive); below that an ordinary receipt is enough. A valid tax invoice must show the words 'tax invoice', the seller's identity and ABN, the issue date, a description of what was sold, and the GST amount (or 'Total price includes GST'). For invoices of $1,000 or more it must also show the buyer's identity or ABN.
RCTIRecipient-Created Tax Invoice: A tax invoice issued by the buyer (the recipient of the goods or services) instead of the seller. Allowed only in ATO-recognised situations — typically where the buyer determines the value, such as agricultural produce, scrap metal, or contractor settlements. Both parties must be GST-registered and have a written RCTI agreement; the invoice must state it is a recipient-created tax invoice. Common in industries where the buyer calculates what is owed after delivery.
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) — but 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: June 2026 by Bishal Shrestha