Australian tax · FY2022-23
Company tax rate calculator
For 1 July 2022 to 30 June 2023 a company pays 25% if it is a base rate entity and 30% if it is not. That turns on two tests, not one — turnover and passive income. Enter both and this says which rate applies and why.
FY2022-23Other years
Calculator
Not a base rate entity, so the 30% rate applies.
This is an estimate, not advice. It applies the published rate to what you enter; whether the method suits your circumstances, and whether your records support the figures, is a question for your tax agent.
Both tests, not just turnover
A base rate entity is a company that meets both tests for the year:
1. Aggregated turnover below $50,000,000. Aggregated, not the company’s own — it counts connected entities and affiliates, so a company inside a group is tested on the group’s turnover rather than its own slice of it.
2. No more than 80% of assessable income is passive income. Dividends, interest, rent, royalties, net capital gains, and distributions from a trust or partnership traceable to those. Exactly 80% still passes; 81% does not.
The second test is the one that surprises people. A company set up to hold a single rental property has almost no turnover and pays 30%, because rent is passive income and it is all of the company’s income.
The franking rate can differ from the rate paid
The rate a company franks a dividend at is its corporate tax rate for imputation purposes, and that is worked out on the previous year’s aggregated turnover, assuming this year’s passive-income proportion is the same as last year’s.
So a company that grew past $50,000,000 this year pays 30% on this year’s profit while still franking at 25% — and one that shrank below it does the reverse. The figure above assumes last year looked like the year you have entered. Where it did not, franking at the wrong rate over-franks or under-franks every distribution statement for the year.
A company has no tax-free threshold
Unlike an individual, a company is taxed on its first dollar of taxable income — there is no tax-free threshold and no progressive scale. One flat rate applies to the whole of the taxable income, which is why the answer above is a single multiplication rather than a ladder.
A company with a tax loss pays nothing and carries the loss forward, subject to the continuity of ownership and similar business tests. This page assumes a profit.
What this page does not cover
It is the company’s own tax. It does not work out what a shareholder pays on the dividend — that is the franking credit above plus the shareholder’s marginal rate, and a refund where the credit exceeds it.
Nor does it cover PAYG instalments, the company’s franking account balance, or money taken out of the company other than as a dividend — for which see the Division 7A minimum repayment.
Preparing a company return?
BeforeMay builds the working paper behind the return from the company’s own documents — the profit and loss, the reconciliation, and the schedules that feed it.
Start a case freeWhere does client data go?
Three returns free. No card.
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