Guides · 15 October 2026
How much tax should a small business set aside?
The honest answer is “it depends”. But you can get close with four buckets and a separate bank account.
Bucket 1: GST
If you’re registered for GST, roughly one-eleventh of what customers pay you (on taxable sales) isn’t yours. Less the GST on your business purchases, that’s what goes on your BAS.
Bucket 2: PAYG withheld
Tax you withhold from staff wages belongs to the ATO from the moment payday happens. Move it aside the same day.
Bucket 3: Superannuation
From 1 July 2026, under Payday Super, employers pay super for each payday rather than quarterly, and the fund must receive it within 7 business days. Treat it like part of the wage bill.
Bucket 4: Income tax
This depends on structure. A company that qualifies as a base rate entity pays 25% company tax; otherwise it’s 30%. Then there’s personal tax when profit reaches you as wages or dividends. Sole traders and trust beneficiaries pay personal rates. A common starting point is to set aside 25 to 30% of net profit, then let your accountant refine it.
Make it automatic
Open a separate account and move money into it every week. The free business tax health check gives you a rough monthly figure in two minutes.
When the numbers don’t add up
If setting aside tax leaves too little to run the business, that’s a pricing, margin or cash flow problem, not a tax problem. Our 13-week cash flow forecast guide is a good place to start.
Quick answers
What tax rate does a small company pay?
A company that is a base rate entity pays 25%; other companies pay 30%.
What percentage of profit should I set aside for tax?
Many owners start with 25 to 30% of net profit plus GST and PAYG, then refine it with their accountant.
Want to see your own numbers?
If you were sent a pack with a code, enter it on the Got a code? page to open the calculators. Otherwise, book a 15-minute chat with Tereza or take the free business tax health check.
Sources
General information only. This doesn’t take your circumstances into account and isn’t tax, financial or legal advice. Talk to your accountant or registered tax agent before acting. PRM is not a registered tax agent; tax agent services are provided by Australian Tax & Super Pty Ltd (TPB 25291395).