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 John Reilly September 6, 2025
Thank you to our valued client!
By John Reilly August 26, 2025
What happens to your superannuation when you die?
By John Reilly August 19, 2025
Executors checklist for a deceased person
By John Reilly August 17, 2025
Have you planned for your death?
By John Reilly August 4, 2025
Why I Still Love What I Do After 20 Years in Accounting & Tax
By John Reilly August 4, 2025
Motor Vehicle Deductions
By Ana Reilly August 4, 2025
Work From Home Deductions
By John Reilly August 4, 2025
ATO Scam Awareness
By John Reilly June 17, 2025
What's changing in Superannuation for 2025FY
By John Reilly June 10, 2025
Our Top Tips for Using Xero