Paying company tax? What's different to being a sole trader?

John Reilly • February 10, 2025

Paying company tax? What's different to being a sole trader?

Being a Sole Trader you pay tax at your marginal bracket on the profit In your business.


The first point to note, any money you withdraw from the company bank account has tax consequences for you. Taking money out correctly, e.g. wages from the company bank account, will reduce potential tax shock in the future.


When you pay yourself a wage, you will withhold PAYG (i.e. wages tax). Most software packages (e.g. Xero) will work out how much is required.


As you are now an employee, you are now legally required to pay superannuation on your wage. The software package will work this out for you. 


Any profit left in the company (after you have taken a wage) tax is calculated at 25% for small business (30% for large).


If you have a motor vehicle in the company, you might be liable for Fringe Benefits Tax (FBT).


All these tax (except super) are paid on your Business Activity Statement, usually quarterly.

By Ana Reilly May 6, 2026
Testimonial
By Ana Reilly April 27, 2026
3 Smart Habits Of A Well-Run Business
By Ana Reilly April 24, 2026
Meet Our Team Members
By Ana Reilly April 17, 2026
Meet Our Team Members
By Ana Reilly March 24, 2026
More Than Numbers: Financial Wellbeing in Business
By Ana Reilly March 16, 2026
Fringe Benefits Tax - Exemptions for Electric Cars.
By Ana Reilly March 9, 2026
What happens when you can’t find your accountant?
By Ana Reilly March 2, 2026
Thank you to our lovely client Neil!
By Ana Reilly February 23, 2026
CGT Series: Buying your own business premises
By Ana Reilly February 16, 2026
What happens if you hate your Accountant?